原文作者:Rick Mada
原文来源:prestolabs
原文标题：The 2024 BTC Halving Preview: Bullish but is it tradeable?
编译:深潮TechFlow
Abstract of this article
- On the surface, the highly anticipated halving in the Bitcoin network has been bullish historically.
- However, given the number of halving events in history, and a closer look at BTC's performance in the overall market context, it is difficult to make any highly definitive judgments based on the halving event itself alone.
- Overall, the Bitcoin halving may not be a tradable event, but it is structurally bullish from a supply perspective. With the right macro trailing, BTC could rise again after the halving.
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The consensus on the Bitcoin halving is that it is bullish, with the prevailing belief that it is a tradable event. But is that really the case? In this article, we delve into past halving events and look at supply and macro data for the upcoming 2024 halving to gain a deeper understanding of what this pre-announced event means for investors.
What is Bitcoin Halving?
Halving, is a pre-programmed event in the Bitcoin network that halves the rewards of Bitcoin miners (see below for more on what this means). This is an important mechanism in Bitcoin's monetary policy, which ensures that only 21 million BTC will be in circulation, as well as preventing inflation, as it reduces the rate at which new BTC is created.
This pre-programmed update occurs every 210,000 blocks, roughly equivalent to every four years, with the next estimate being April 20, 2024. When Bitcoin was launched in 2009, the mining reward was set at 50 BTC, and after three halvings (2012, 2016, and 2020), the reward will soon drop to 3.125 BTC per block.
Bitcoin uses a proof-of-work (PoW) consensus mechanism to verify and secure transactions on the blockchain. In PoW, miners compete to solve complex mathematical problems, and the first miner to solve the problem correctly will be able to add the transaction for the next block to the blockchain. To validate transactions and add blocks to the blockchain, the winning miner is rewarded with newly created Bitcoin, and this reward is "halved" in the halving.
The reality of the halving of history
On the face of it, the halving proved to be very bullish for BTC.
Figure 1 below shows the historical price movement of BTC before and after each previous halving day, from the year before to the year after. The red dotted line shows the volume-weighted average of the past halving, while the black line shows the current BTC path.
Figure 1: The halving is bullish on BTC
Figure 2 below shows the performance of the Bitcoin halving in a table format.
Figure 2: Bitcoin's performance near the halving
Since the upcoming halving is scheduled for 4/20/24, we extrapolate the prices of the last few days by using the latest price data from 4/17/24.
The log-proportional y-axis of Figure 1 suggests that the halving was a bullish catalyst, but considering that we only had three observations, the first at just $12.80 for BTC, and the third in May 2020, when all risk assets rose sharply amid the Covid rally, it seems that any interpretation of the data by QE monetary policy needs to be treated with caution. Moreover, when we look at the average 1-year return of BTC since mid-2011, the 1-year return after the halving doesn't look impressive, except for the first halving in 2012.
Here, the 2020 halving raises an interesting question about how the global market is performing in general. In Figure 3 below, we replicate Figure 2, using stocks, specifically the S&P 500, as a benchmark for risk assets:
Figure 3: The S&P 500 performed before and after the halving
SPX's 1-year average rolling return of +11.42% (in line with the historical BTC price data we have since mid-July 2011), while its 1-year average since the Bitcoin halving is more than +27%, or more than double the average! Just as we won't conclude that "as a result, the program update in the Bitcoin network that halves the rewards miners receive is very bullish on the S&P 500", we may not be able to draw real conclusions from Bitcoin's past performance. Otherwise, with some measures such as a better-than-average performance hit rate, you can even conclude that the Bitcoin halving is better for SPX than it is for Bitcoin itself!
For those interested in volatility, there is no obvious relationship with the halving date or period. Figure 4 examines realized volatility 30 days before and after the halving date:
Figure 4: There is no pattern to BTC volatility
2024 Halving Theme
1: Long-term holders
Here, we take a look at the total amount of BTC held by long-term holders, adjusted by BTC supply. Given that the circulating supply of BTC increases before the hardcoded 21 million Bitcoin cap is reached, we divide the amount of long-term holders by the circulating supply at that time to see the percentage of holdings:
Figure 5: Bitcoin held by "long-term holders".
Although less pronounced in 2020, Figure 5 shows that long-term holders are likely to profit before the halving, with declines also seen in 2024. This selling dynamic is often attributed to miners, and since the halving essentially reduces revenue per block by 50%, miners will often sell a portion of their reserves to upgrade their hardware to mine more efficiently when the rewards are reduced. With we just a few days away from halving in 2024, this structural selling pressure may be happening.
2: Exchange BTC balance
While exchanges don't make directional bets, we'll still look to see if there is some pattern around the halving day in the exchange's reserve holdings (and by extension, their internal market market makers):
Figure 6: Bitcoin held by cryptocurrency exchanges
There is nothing interesting to see in Figure 6 related to the halving. The only observable trend is a more long-term trend, with exchange balances experiencing an accumulation of about 6 years, the balances of which have steadily declined with the start of the previous bull market.
3: Macro background
The relevance of macro conditions to Bitcoin is often debated, but macro cycles, especially USD liquidity (as a function of monetary policy/interest rates, risk appetite, etc.) remain the driving force of asset prices in the medium to long term. With this in mind, we focus on the next 12 months where the market is pricing in the federal funds rate on the halving date.
Figure 7: The Fed at the time of the halving
It is clear that the upcoming halving in 2024 is an outlier, with almost 3 rate cuts expected.
Lowering interest rates is generally good for risk assets, but what is important for price action is often not the rate that has already been priced, but the magnitude of the deviation from market expectations, whether it is inflation data or a statement from the Fed chairman. In Figure 8, we compare the actual settlement implied rate and market expectations for each halving day to see how accurate the forward pricing in Figure 7 is.
Figure 8: Accuracy of Fed Expectations
The figures for 2012 and 2020 were fairly ordinary, no more than 10 basis points off the range originally expected, but 2016 is worth looking into because the Fed raised interest rates twice, which was not priced in at the time of the second halving. Interestingly, Figures 1 and 2 show that the 12 months following the 2016 halving were the worst performers for BTC among the three previous halvings, and the only time it performed below the 1-year average return. As a result, there have been more than two rate adjustments for the next 12 months today, so a more important driver after the BTC halving could be persistent inflation in the US, or anything else that might encourage the Fed to stay unchanged rather than cut rates.
conclusion
We briefly explored the unique macro context for the upcoming halving, but there are other considerations not mentioned in this report, mainly around the recent spot BTC ETF launch. This is definitely the most anticipated halving to date, given that BTC has attracted all the attention recently, and the general institutionalization of BTC introduces new players that could change the dynamics of supply and demand and price action. It's worth noting here that the newly launched ETF holds more than 4.1% of the BTC circulating supply, while MicroStrategy owns more than 1%. Given that there have only been three previous halvings, it is difficult to draw a statistically significant conclusion from past performance to determine whether this is a tradable event or not. But structurally, this is undoubtedly a bullish event from a supply perspective.