Bitwise CIO: Bitcoin halving is ‘buy the news’ event
Bitwise Chief Investment Officer Matt Hougan offered a long-term view on the Bitcoin halving based on historical data and spot ETF demand.
Speaking with CNBC on April 19, Hougan regarded this year’s Bitcoin (BTC) halving as a “buy the news” opportunity for investors interested in the world’s biggest cryptocurrency asset class.
“If you look historically at halvings, the price action within a week or two after the Bitcoin halving is relatively muted. But if you look out at a year, BTC prices have rallied substantially after each of the past three halvings and I think it will do so again.”
Matt Hougan, Bitwise CIO
The halving is a pre-installed code change designed by anonymous Bitcoin creator Satoshi Nakamoto to throttle BTC inflation and maintain supply scarcity. Nakamoto built the system to slash mining rewards by 50% every 210,000 blocks or four years.
As block mining rewards are halved, so is the amount of new BTC entering circulation. Many believe this reduced supply, combined with increasing demand through spot Bitcoin ETFs, will result in higher prices by next year. Hougan, whose company is a BTC ETF issuer, sides with this sentiment.
“The amount of new supply of Bitcoin coming into the market is being cut in half. We’re removing $11 billion of annual supply. I think big picture, that has to be good for price and that’s what I would expect over the next year.”
Matt Hougan, Bitwise CIO
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