Bitwise CIO believes market has not priced in future demand for Bitcoin post-halving

Share This Post

Bitwise CIO Matt Hougan cast doubt on whether current prices truly capture the potential impact of increased demand following Bitcoin’s upcoming halving based on the Efficient Markets Hypothesis (EMH).

Hougan raised critical questions about the limitations of EMH in anticipating what the market will be like post-halving. He pointed out that while EMH suggests that Bitcoin’s current price reflects all available information, including the anticipated supply cut from the halving — it does not account for unexpected shifts in market demand.

Hougan said:

“The halving is well known, so today’s price reflects that it will occur… [but] what if future demand for bitcoin is higher than the market currently anticipates?”

The Bitwise CIO added that the market might have already priced in the direct effects of the halving, but the hypothesis cannot anticipate the level of future demand.

Hougan referenced Nobel Prize winner Robert Shiller’s work, which highlights the discrepancies between EMH predictions and actual market behavior, to support his arguments.

Shiller’s research suggests that while EMH may be applicable on a micro-scale to individual stocks, broader market trends can defy these predictions.

Forced vs. willing sellers

Hougan also delved into the dynamic between “forced” and “willing” sellers within the Bitcoin ecosystem. He explained that miners, who face high operational costs, are primarily forced sellers and will see their contributions to market supply drop significantly post-halving.

This reduction shifts the market trend toward willing sellers, who have to be compelled to let go of their Bitcoin by offering higher prices. Willing sellers mostly comprise long-term holders.

He argued that this shift could create “significant upward price pressure” if the market has indeed underestimated future demand, suggesting a bullish outcome as increased demand meets a limited supply.

As the bitcoin community and investors around the globe prepare for the halving, Hougan’s critical analysis provides a thought-provoking perspective on how traditional economic theories like the EMH apply to the dynamic and often unpredictable crypto markets.

His insights suggest that investors should consider potential deviations from established market predictions, underscoring the complexities and uncertainties that come with crypto investments.

Bitcoin was trading at $64,300 as of press time, roughly seven hours away from its fourth halving.

The post Bitwise CIO believes market has not priced in future demand for Bitcoin post-halving appeared first on CryptoSlate.

Read Entire Article
spot_img

Related Posts

Did A Dogecoin Whale Just Sink The DOGE Ship? The $30-Million Transfer Mystery

Dogecoin (DOGE), the meme-inspired cryptocurrency with a loyal following, has been riding a wave of optimism lately Over the past week, its price surged by nearly 8%, much to the delight of investors

Don’t Get Bitten! France Cracks Down On Unregistered Crypto Platform Bybit

French regulators are sending a strong message to the cryptocurrency industry: play by our rules, or get out The latest target Bybit, a major crypto exchange, which has been blocked by the French

Infamous crypto scam service Pink Drainer shuts down after netting $85 million

Pink Drainer, a notorious crypto wallet-draining service, is winding down its operations, according to a May 16 screenshot shared by blockchain sleuth ZachXBT A Dune analytics dashboard by Web3

Farmsent to enhance smart farming with Nuklai AI tools as peaq raises $35M amid token launch

Nuklai, an on-chain smart data platform, and peaq, a layer-1 blockchain for decentralized physical infrastructure networks (DePINs), have announced an integration aimed at enhancing AI and data

Spot Bitcoin ETFs Record Third Day Of Massive Inflows As Price Tops $66,000

In another remarkable day for cryptocurrency investments, US-based spot Bitcoin Exchange Traded Funds (ETFs) witnessed a substantial influx of capital, totaling $2573 million on Thursday This

US Bitcoin ETFs see fourth consecutive day of inflows, adding $257.3 million

Quick Take US ETFs According to data from Farside, US Bitcoin (BTC) exchange-traded funds (ETFs) saw a $2573 million inflow, marking the fourth consecutive day of inflows The inflows were widespread,
- Advertisement -spot_img