Goldman Sachs: Don’t Overinterpret the Past Bitcoin Halving Cycle, Macro Conditions May Be the Determining Factor

Goldman Sachs: Don't Overinterpret the Past Bitcoin Halving Cycle, Macro Conditions May Be the Determining Factor

Goldman Sachs: Don't Overinterpret the Past Bitcoin Halving Cycle, Macro Conditions May Be the Determining Factor

The Bitcoin halving, which occurs every four years, is expected to take place on April 20th in Taiwan time. At that time, the block reward will be reduced from 6.25 BTC to 3.125 BTC. In the past few cycles, the price of Bitcoin has experienced months of significant growth after each halving, leading many individuals in the cryptocurrency community to believe that history will repeat itself.

However, according to a report by CoinDesk, investment banking giant Goldman Sachs has cautioned its clients against overinterpreting past halving cycles. In a report to clients on April 12th, Goldman Sachs’ Fixed Income, Currency, and Commodities and Equities (FICC and Equities) teams stated that while the market was dominated by bulls after the previous three halvings, the magnitude and duration of reaching the final high points varied. Additionally, the macroeconomic environment at that time was different from the current high inflation and high interest rate environment.

Goldman Sachs believes that the Bitcoin halving serves as a “psychological reminder” of Bitcoin’s limited supply for investors, and the medium-term outlook depends on the absorption of Bitcoin spot ETFs. The Goldman Sachs team wrote:

Related reports: “21Shares Report: What’s Different About the Fourth Bitcoin Halving?” “Bitcoin Halving Countdown! Bernstein Analyst: BTC Will Challenge $150,000 Target Price After Halving” “10x Research: Miners May Sell $5 Billion Worth of Bitcoin After Halving, Leading to Months of Sideways Volatility”