Banking giant Goldman Sachs warned those interpreting the upcoming Bitcoin halving based on past years.
Following the fourth Bitcoin halving expected to take place on April 20, block rewards will decrease from 6.25 BTC to 3,125 BTC and the daily new BTC entering circulation will be halved.
Goldman Sachs analysts said, “Historically, there has been an increase in BTC price post-halving, even though the time to break new records after Halving has varied. With the current macro conditions, when interpreting the effects from past cycles and Halving, caution should be taken.”
The chart below shows Bitcoin’s performance after the halvings on November 28, 2012, July 9, 2016, and May 11, 2020.
Moving forward, macro conditions have had a significant impact on Bitcoin price post-halving. In 2020, during the halving period, leading central banks such as the Fed, the European Central Bank, and the People’s Bank of China experienced substantial increases in money supply.
Bitcoin price has risen by approximately 50% this year to break a new record for itself. Some analysts believe that the halving effect has already been reflected in the price.
Goldman Sachs analysts believe that Bitcoin’s medium-term performance depends on the dynamics of supply and demand and the demand for Bitcoin ETFs.
