Goldman Sachs Warns Bitcoin Investors: Do Not Draw Conclusions from Previous Halving Cycles

In a note to clients, analysts at Goldman Sachs (NYSE:), one of the world’s largest investment banks, advised against drawing conclusions based on data from previous half-terms due to change macroeconomic factors.

It should be noted that the “halving” event – which is expected in two days – happens every 4 years and leads to the benefits for Bitcoin trading block mining (Bitcoin-BTC) to be apart. This time, it will be reduced from 6.25 to 3.125 BTC, so that the rate of issuance of new coins will be reduced by half, which will make them scarce and an increase in demand for which lasted for several months, which the crypto communities believe it will happen again.

Goldman Sachs analysts understand this in their report on currencies, commodities and stocks (FFIC) – issued on April 14 – by saying: “Historically, increases in Bitcoin prices after the previous three semi-cycles, but the time it took for the price. to record different new highs.”

These analysts expressed skepticism this time, warning their clients that “They should be careful when drawing conclusions based on previous halving cycles and the effect of semi-bonuses with the macro data different economic.” Their doubts stem from the difference in macroeconomic factors now from what they were in previous half-cycles, especially the increase in inflation and interest rates, which are signs that should not ignore them.

In the past year, the money flow index (M2) of the major central banks – including the People’s Bank of China, the European Central Bank, the Bank of Japan, and the Federal Reserve – rose the USA – at an incredible pace, until the interest rates of developed countries were still zero or negative, which encouraged investment in… Risk funds across financial markets including crypto markets; The bank believes that similar macroeconomic factors are needed to accept risks so that the same results are repeated during this cycle.

But the situation has changed today, as the reading of interest rates in the United States – the largest global economy – has crossed the 5% mark, with the hope of the reduction soon dissipating, with that traders estimate the possibility of the reduction in June with only 20.6%, compared to 45.9% in September, according to the Chicago Stock Exchange (CME) FedWatch tool, a negative view shared by some Others have issued similar warnings such as Bitwise.

Historically, the Halving has been good for the long-term price of Bitcoin (look at the data)

The change in the price for Bitcoin in the year after the fiftieth year:

2012: 8,839%

2016: 285%

2020: 548%

The change in the Bitcoin share price for the month after the second half:

2012: 9%

2016: -10%… pic.twitter.com/aaXSakLfko

— Bitwise (@BitwiseInvest) April 16, 2024

Goldman Sachs admits there is still a glimmer of hope

Goldman Bank maintained hope despite the fact that economic factors did not provide a suitable environment for the crypto sector to continue growing, explaining that the half is only “a psychological reminder to investors about the stability of the Bitcoin supply”. height,” and that the determination of medium-term expectations will depend on the level of investments they enjoy through Bitcoin exchange-traded funds (Bitcoin ETF).

“The price of BTC is likely to continue to perform, driven by the previously mentioned supply and demand mechanisms and the popularity of investing in Bitcoin ETFs, which – in parallel to the auto-responsive nature of the crypto markets – is a key driver. of Bitcoin price movements instantaneously.” According to bank analysts.

It is reported that in the last 6 months, Bitcoin ETF investments in the United States have grown by 130%. According to Bloomberg, the 11 exchange-traded funds launched three months ago now manage assets worth $59.2 billion. Therefore, some analysts believe that most of the gains that are usually after the half have been achieved, which may lead to a decline due to “buying when a rumor appears, sell when it materializes” after the halving is expected to take place on April 20, according to a Goldman Sachs report.

This view is supported by the decline in investment in Bitcoin ETFs, despite the fact that they have received more than $12 billion in investments since the Securities and Exchange Commission (SEC) approved their launch in January. While most of these investments were flowing in the last quarter, they lost momentum this month.

Markus Thielen, founder of 10x Research, pointed to the effect of “the initial hype around a new event, as investments coming into ETFs tend to slow down because prices are not going up , and that is what the situation has indicated since early March. ” /March”.

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