Following the victory of Donald Trump in the United States election, the price of Bitcoin has gone higher.
According to Onramp Bitcoin’s Co-founder Jesse Myers, Donald Trump’s victory may not be the main story driving the BTC price. On November 11th, Jesse took to his X account to debunk the speculations as he shared:
“If you’re wondering what’s happening with Bitcoin…Yes, the incoming Bitcoin-friendly administration has provided a recent catalyst…
“But, that’s not the main story here. The main story here is that we are 6+ months post-halving.”
Post-halving, according to Coinbase, is when a new coin, in this case Bitcoin, gets cut in half. That means there is a 50% reduction in the reward miners receive for validating transactions and adding them to the Blockchain. In simpler terms, it is lowering the supply of Bitcoins entering the market, increasing the scarcity, and raising its price if market conditions remain the same.
The halving takes place every four years. The last Bitcoin halving was on April 19, 2024, resulting in a block reward of 3.125 BTC.
According to Myers, this increase in Bitcoin price is a result of the accumulation of supply shocks. There’s not enough supply available at current prices to satisfy demand, and supply-demand price equilibrium must be restored.
He further explained that Bitcoin is all about supply and demand. “What people fail to see is how both sides are predictable. Yes, you cannot forecast demand directly. But you can predict supply, and you can predict roughly how human psychology will interact with that. Voila, demand.”
Myers also added that “the misattribution of bullish Bitcoin price action every 4 years to exogenous factors (e.g., the election, global macro) is as reliable as Bitcoin’s price action every 4 years due to endogenous factors (e.g., the halvings, adoption).“
To answer the question of whether you should invest in Bitcoin before or during a halving depends on personal reasons.
Many investors have high expectations for halvings because, in the past, prices went upward after the event. However, the trends historically moved slowly, over months and years until the next halving, and there is no guarantee that Bitcoin will follow the same trajectory. So, whether you invest in Bitcoin before, at, or after a halving depends on market conditions at the time, your outlook, and your risk tolerance level.
To end with Jesse Myers’ words, “It sounds crazy to say there will be a reliable, predictable bubble every 4 years. But then, there’s never been an asset in the world where new supply creation is halved every 4 years.
A post-halving bubble is the result. It’s what happened after the 2020, 2016, and 2012 halvings. And now it’s taking shape again. Welcome to the post-2024 halving bull market. This thing goes much higher.”
