10/01/2024
Bitcoin halving, BTC ETF hype driving price up into 2024 β NBX Berlin
The potential approval of spot Bitcoin exchange-traded funds (ETFs), the looming BTC mining reward halving and major regulatory and enforcement actions have a profound psychological effect on market prices.
This is a key takeaway from the Next Block Expo conference in Berlin, just as Bitcoin tipped past $42,000 for the first time in over a year.
Animoca Brands CEO Robby Yung, gumi Cryptos Capital managing partner Miko Matsumura, Binance regional manager Jonas JuΜnger, and Polkastarter business development lead JoaΜo Leite weighed in on whether the current cryptocurrency bear market was coming to an end in a conversation with Cointelegraph.
Bitcoin halving is a psychological phenomenon
Considering the influence of the four-year cycle between Bitcoin mining reward halvings, Matsumura likens the rhythm to that of a medieval battering ram.
βEvery four years, we swing the ram, and we smash. Four years is long enough that the people inside the castle think weβve gone away,β the venture capitalist explains.
Matsumura says that the halving cycle involves an inherent Schelling focal point mechanism, which is a game theory concept and social phenomenon where people or organizations can coordinate without communication.
βItβs important to think about it as a psychological training phenomenon because each time it works, it inclines people to go with it the next time it happens.β
He also suggests that Bitcoinβs stock-to-flow model clearly shows that the actual cut in BTC supply is getting smaller with each halving, which means βthe actual mathematical economic effect is smaller.β
JuΜnger echoes these sentiments by highlighting the deflationary mechanism of the Bitcoin protocol and that thereβs never talk of halving the fiat money supply.
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