🔥 Is The Bitcoin Halving Causing Bull Markets? New Theory!
Updated
The classical Bitcoin theory about halvings is that they "cause" bull-markets because the supply mined gets halved, leading to a negative supply shock and therefore increasing the value per Bitcoin.
This is not a surprising theory since it makes a lot of sense and has worked in the past. But, is the halving really that important for the Bitcoin price?
I've plotted the balance sheets of the largest central banks in white. If this line goes up, it indicates an expansion of the balance sheet (Quantitative Easing / QE), which can roughly be interpreted as printing money. It appears that Bitcoin bull- and bear-markets are highly correlated with central banks expanding their balance sheets. White line goes up, BTC goes up, white line goes down (or sideways) BTC goes down.
I've marked two previous occurrences where the central banks started QE in purple. Bitcoin arguably started the bull-market from those points, and not once the halving (yellow) took place.
From this chart we can conclude that the Central Banks are a decisive factor in the start and end of Bitcoin bull markets. Sure, the halving is a highly anticipated event among retail investors and manages to revive the interest into crypto, but I'd argue that QE (= a better investing climate) is the main reason why Bitcoin goes up and down in cycles.
In other words, we can have a BTC bull-market during a period of QE without the halving taking place. We can't have a bull-market after the halving without QE.
If you enjoyed this analysis, please give it a like. Share your thoughts below 🙏
This is not a surprising theory since it makes a lot of sense and has worked in the past. But, is the halving really that important for the Bitcoin price?
I've plotted the balance sheets of the largest central banks in white. If this line goes up, it indicates an expansion of the balance sheet (Quantitative Easing / QE), which can roughly be interpreted as printing money. It appears that Bitcoin bull- and bear-markets are highly correlated with central banks expanding their balance sheets. White line goes up, BTC goes up, white line goes down (or sideways) BTC goes down.
I've marked two previous occurrences where the central banks started QE in purple. Bitcoin arguably started the bull-market from those points, and not once the halving (yellow) took place.
From this chart we can conclude that the Central Banks are a decisive factor in the start and end of Bitcoin bull markets. Sure, the halving is a highly anticipated event among retail investors and manages to revive the interest into crypto, but I'd argue that QE (= a better investing climate) is the main reason why Bitcoin goes up and down in cycles.
In other words, we can have a BTC bull-market during a period of QE without the halving taking place. We can't have a bull-market after the halving without QE.
If you enjoyed this analysis, please give it a like. Share your thoughts below 🙏
Note
Central banks balance sheet formula in Tradingview:ECONOMICS:USCBBS+ECONOMICS:JPCBBS/FX:USDJPY+ECONOMICS:CNCBBS/FX_IDC:USDCNY+ECONOMICS:EUCBBS/FX_IDC:USDEUR
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