Upcoming Bitcoin Halving Unlikely To Be Bullish Catalyst, Says Crypto Analyst Nicholas Merten – Here’s Why

Crypto analyst Nicholas Merten believes Bitcoin’s (BTC) next halving will not ignite the renewed bull market that many traders and analysts expect.

In a new video update, Merten tells his 512,000 YouTube subscribers that unlike many other analysts, he does not believe the BTC halving event in 2024 will spark a huge rally as past ones did because it’s impact on new supply will not be enough of a catalyst.

Bitcoin halvings occur every four years, cutting BTC mining rewards in half BTC and therefore reducing the amount of new supply entering the market. The next one is expected on April 15th.

Says Merten,

“There’s a big misconception here. That halving reduction, while it is technically declining the inflation rate in half, the problem is that inflation rate reduction in nominal terms – in real actual impact of terms – is getting weaker and weaker and weaker over time. And this also explains why Bitcoin has had diminishing returns over time. It doesn’t expand as rapidly as it has in the past.”

The next halving will reduce miner rewards from about 6.25 Bitcoin per block to 3.125 Bitcoin per block. Merten says that since the value of the reduction is relatively small compared to the BTC’s total market cap, he doubts it could spark a major rally.

“That is going to mean 164,250 less Bitcoin minted every year, or $4.4 billion at current market rates of Bitcoin hitting the spot market, potentially for miners selling it in order to cover their operational expenses for electricity, for the computer hardware…

If we take it to a daily timeframe, that’s 450 Bitcoin less per day, or essentially at current market rates $12 million dollars less of potential sell side pressure. May sound like a lot here, something that even could kick off a new bull market. But while these numbers might sound very big, when we consider them against the valuation and the size of Bitcoin as a market, it starts to not look so optimistic.

Just consider Bitcoin’s market cap here and take a look at the current valuation of it as an asset, rather than the entire crypto market. Bitcoin right now is sitting at a $523 billion market cap, nearly more than half a trillion dollars in market capitalization. So, if we take that $4.4 billion figure, which sounds like a lot, we really start to realize that it’s not even a percentage of Bitcoin.”

Bitcoin is trading for $26,776 at time of writing.

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