The chief investment officer of crypto fund manager Bitwise says the halving event for Bitcoin (BTC) is a bullish catalyst.
In a new interview with CNBC Squawk Box host Andrew Sorkin, Bitwise CIO Matt Hougan says that the April 19th halving, when miners’ rewards are cut in half, could spark a massive rally based on historic precedence.
[adinserter block="1"]However, he predicts that the bullish effects will be felt in the long term only.
“I think this is a buy-the-news event if you pan out long-term. If you look historically at halvings, the price action around the halving if you look at a week or two weeks is relatively muted, but if you look out a year, the Bitcoin price has rallied substantially after each of the past three halvings and I think it will do so again. I think you can overthink this.
The amount of new supply of Bitcoin coming into the market is being cut in half, removing $11 billion of annual supply. I think big picture that has to be good for price and that’s what I would expect over the next year.”
He also believes the spot Bitcoin exchange-traded funds (ETFs) will funnel more liquidity into the top-performing digital asset, boosting its value.
“What ETFs have done is they’ve unlocked the ability for professional investors to access this market. It’s very difficult for endowments, advisors, and family offices to buy Bitcoin on an app. It’s much easier in an ETF. So I think the marginal new buyers are in the ETF…
Bitcoin is going through both a demand shock from the launch of the ETF and a supply shock from this Bitcoin halving. Those are happening at the exact same time. And that’s a really exciting set up for the next year ahead.”
Bitcoin is trading for $63,862 at time of writing, up slightly in the last 24 hours.
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