Bull cycle may last a year despite post-halving Bitcoin drop: Interview with Gracy Chen

As the crypto community eagerly anticipates the upcoming halving event, excitement and speculation have reached a fever pitch. With Bitcoin, the pioneer cryptocurrency, set to undergo its third halving, the markets are experiencing a surge of activity and enthusiasm. But amidst the fervor, questions linger about what lies ahead for the crypto landscape.

The halving, a programmed event in Bitcoin's protocol designed to reduce the rate at which new coins are created, has historically been a pivotal moment for the cryptocurrency market. It occurs approximately every four years, cutting the reward for mining new blocks in half. This mechanism serves to control inflation and maintain the scarcity of Bitcoin, mirroring the supply constraints of precious metals like gold.

Leading up to the halving, market dynamics often exhibit heightened volatility as traders and investors position themselves for potential price movements. Speculation runs rampant, with some foreseeing a significant surge in Bitcoin's value as its issuance rate decreases, while others remain cautious, considering the possibility of a post-halving sell-off.

The recent bullish sentiment has propelled Bitcoin to new heights, with prices surging and breaking through key resistance levels. This bullish momentum has not been limited to Bitcoin alone, as altcoins also experience notable gains, riding on the coattails of Bitcoin's ascent.

However, amidst the excitement, it's crucial to maintain a balanced perspective and consider the broader factors influencing the crypto market. While the halving historically precedes periods of bullish activity, past performance is not indicative of future results. Market dynamics are influenced by a multitude of factors, including macroeconomic trends, regulatory developments, and technological advancements.

We spoke to Gracy Chen, the managing director at Bitget, to understand their outlook on the market and what they believe could be the halving’s impact going forward:

How do you believe this halving will differ from the previous ones? 

Today, the concept of the halving event attracts far more attention than just a couple of years ago. Back in 2020, only a fraction of the population owned a small amount of Bitcoin, and the halving was largely confined to discussions within the crypto community. Fast forward to today, and its significance extends well beyond the cryptocurrency market. This shift marks a monumental change.

For miners, the landscape has transformed drastically. In a bid to address immediate financial pressures, miners have explored various avenues, from equity and debt issuances to reserve sales, all in response to cut block rewards and increased production costs.

Overall, this halving event stands apart from its predecessors, primarily due to favorable updates in market structure and fundamental on-chain activity. Despite challenges posed to miner revenue in the short term, the overall outlook remains promising.

Are there any market fundamentals that could be propelling crypto besides the halving? 

Regulation in cryptocurrency plays a crucial role. Once the market can lean on robust global cryptocurrency regulations, we may again speculate over whether Bitcoin stands as the ultimate alternative to gold. For now, we're witnessing the efficacy of well-regulated code issuance — an indicator we can confidently rely on.

On a micro market side, with a staggering 59 million Non-Fungible-Token-like (NFT) collectibles inscribes on the Bitcoin blockchain and over $200 million in transaction fees for miners recorded as of February 2024, ordinal inscriptions have sparked a revival in on-chain activity. This trend will likely continue to persist, fueled by ongoing advancements in the Bitcoin blockchain and the renewed interest among developers.

What is your price prediction for Bitcoin in the near term – Say, the end of 2024?

By the end of spring, the price of Bitcoin may undergo a correction, and throughout the year, we will observe the potential influence of geopolitical factors on BTC’s performance. It is impossible to ignore the importance of the November presidential elections in the United States or the possibility of a new black swan event among such factors.

While we can analyze how election outcomes might impact Bitcoin's price, black swan events are unpredictable and can lead to a wide range of outcomes.

Let's imagine a scenario without a black swan event. By November, Bitcoin could potentially soar past the $100,000 mark, undergo a corrective phase, and then embark on a journey towards $200,000.

It's important to remember that investment decisions should not rely solely on forecasts; instead, investors should follow a robust trading strategy according to their financial opportunities and market conditions.

Should investors be bracing for another boom-and-bust cycle? 

We are referring to this boom cycle as the Fourth Crypto Boom Cycle, which historically follows the halving event by at least a year. 

This indicates that there are probably still more than 13 months of the Fourth Crypto Boom Cycle left — and if this year’s cycle follows this pattern, these 13 months may turn out to be the most profitable.

Conclusion 

The crypto space is currently witnessing a major boom - and all of this is coming before the halving, which is known to be a catalyst for even more gains. As investors continue to watch market actions, there is a lot of excitement in the air. And right now, it’s more of a question of how long this can last.