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Bitcoin Halving Presents ‘Buy the News’ Opportunity, Says Bitwise CIO

Bitwise’s Chief Investment Officer, Matt Hougan, offered insights into the Bitcoin halving, suggesting it’s a “buy the news” event for investors, as historical data indicates a muted immediate price response followed by substantial rallies over the year.

Scheduled every four years, the Bitcoin halving is a programmed event designed by Satoshi Nakamoto to regulate BTC inflation and maintain scarcity. With each halving, mining rewards are halved, subsequently reducing the influx of new BTC into circulation.

Hougan points out that while the initial price action post-halving tends to be subdued, the long-term impact is significant, with BTC prices rallying after each of the past three halvings. He believes this trend will persist, especially with the current surge in demand driven by spot Bitcoin ETFs.

According to Hougan, the halving’s reduction in the new supply of Bitcoin, combined with increasing demand through spot Bitcoin ETFs, is likely to drive prices higher in the coming year. Bitwise, being a BTC ETF issuer, aligns with this optimistic outlook.

Meanwhile, Coinpass CEO Jeff Hancock emphasizes the maturation of Bitcoin as an asset class, with institutional interest marking a departure from its previous status as a speculative market. He anticipates a unique market cycle driven by institutional demand, especially amidst a backdrop of high inflation and interest rates.

Hancock highlights the success of spot Bitcoin ETFs, with assets surpassing $60 billion in less than six months, indicating sustained global demand. He predicts continued institutional interest in Bitcoin beyond 2024, potentially extending to Ethereum ETFs despite regulatory challenges.

In Hancock’s view, the success of spot BTC ETFs could pave the way for institutional access to Ethereum staking rewards and decentralized finance, further integrating traditional finance with the crypto ecosystem.

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