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Senior cryptocurrency analyst Nicholas Merten suggested that Bitcoin‘s (BTC) next halving, which many investors and analysts are expecting to ignite a renewed bull market, will not do so. Here’s the critical statement from the analyst!
The Halving Process in Bitcoin!
In his recent statements, Nicholas Merten, a senior cryptocurrency analyst, stated that unlike many other analysts, he does not believe that the BTC halving in 2024 will lead to a major rally, as the impact on the new supply will not be a sufficient catalyst. Bitcoin halving occurs every four years, reducing BTC mining rewards by half and thus decreasing the amount of new supply entering the market. The next halving is expected to take place on April 15th. Nicholas Merten stated the following:
There is a big misconception here. This reduction in half technically cuts the inflation rate in half, but the problem is that I expect the decrease in the nominal inflation rate to weaken over time. This also explains why Bitcoin has diminishing yields over time. It’s not expanding as fast as it used to.
The next halving will reduce miner rewards from approximately 6.25 Bitcoins per block to 3.125 Bitcoins per block. Nicholas Merten doubted that this decrease could lead to a significant increase, as it is relatively small compared to Bitcoin’s total market value. The analyst stated the following:
This would mean 164,250 fewer Bitcoins being minted each year or $4.4 billion according to current market rates. It would mean potential selling pressure of 450 Bitcoins less per day or essentially $12 million less from the potential selling side pressure according to current market rates. This may seem like a lot, even something that could start a new bull market. However, when we compare these numbers to the valuation and size of Bitcoin as a market, they don’t seem so optimistic.
Analyst’s Comment on BTC Supply!
Regarding the decrease in supply, the cryptocurrency analyst said the following:
Consider the market value of Bitcoin and look at its current valuation as an asset rather than the entire cryptocurrency market. Bitcoin currently has a market value of $523 billion, which is over half a trillion dollars. So, if we consider this $4.4 billion figure that seems like a lot, we begin to understand that it’s not even a percentage of Bitcoin’s value.
