NYDIG stated that due to increasing concerns about economic recession and rising interest rates, BTC's performance in the third quarter was not surprising. But like previous cycles, the potential for halving remains strong
NYDIG stated that due to increasing concerns about economic recession and rising interest rates, BTC's performance in the third quarter was not surprising. But like previous cycles, the potential for halving remains strong.
- Bitcoin may repeat a pattern similar to halving in 2012, 2016, and 2020.
- All eyes will be focused on the Bitcoin ETF results for the fourth quarter.
In the past few months, many Bitcoin [BTC] holders have believed that the decision to apply for an ETF may be a catalyst for Bitcoin prices to reach parabolic levels. However, this is not the case. This is because the relevant regulatory authorities have chosen to postpone the application until they consider it appropriate.
Nevertheless, BTC's performance from the beginning of the year to the present (YTD) has maintained an impressive 63.3% growth rate. The Bitcoin Strategy Fund New York Digital Investment Group (NYDIG) stated in its market review in the third quarter that Bitcoin has performed exceptionally well, particularly outperforming all other asset classes.
The scene will not change
As reported earlier by AMBCrypto, the token fell by 11% in the third quarter, which is somewhat disappointing. However, NYDIG stated that this is not surprising as concerns about economic recession and rising interest rates are increasing.
Regardless of what is currently happening, the asset management company points out that halving Bitcoin next year is still the main factor that may affect the price trend of Bitcoin.
By April 2024, halving will reduce block rewards from 6.25 BTC to 3.125 BTC, which happens to be 840000 blocks. According to NYDIG, halving remains an important factor from an economic perspective, and it is pointed out that,
By continuously halving the supply function, Bitcoin will eventually reach a point where it cannot be further halved by 2140. This will effectively prevent the growth of Bitcoin's quantity, which is an important component of Bitcoin's "supply control" function
ETFs are also important
In terms of price, the company also mentioned that this will continue the pattern in the previous cycle. For example, after halving in 2016, BTC increased from 1700 to over 15000 a few months later.
The situation in 2012 and 2020 is not completely different. NYDIG also mentioned that the reduction in November 2021 was similar to the experience of the 2018-2019 cycle.
The report further added that there were signs of a rebound in 2019 in 2023. NYDIG explained that,
Although 2023 looks much like 2019, it did not experience such a significant pullback. However, it is important to emphasize the cyclical nature of repetition, as Bitcoin seems to follow the path set in the first two cycles
Nevertheless, NYDIG pointed out that its insistence on halving as a catalyst cannot offset the potential impact of Bitcoin ETF approval.
It also mentioned that the litigation between grayscale and SEC, as well as the final decision on ETF applications, may determine the success or failure of BTC. The report states that,
As we enter the fourth quarter, everyone's attention is focused on legal litigation and the industry's joint efforts to obtain approval for US spot Bitcoin transactions
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