Coinbase says Bitcoin halving history is not a reliable guide.

The cryptocurrency exchange platform Coinbase stated in a report on Wednesday that the upcoming bitcoin (BTC) halving, expected to occur in the second quarter of 2024, may have a positive effect on the performance of the digital currency, but this is not a guaranteed outcome. Analyst David Duong wrote that it is difficult to determine how markets responded to previous bitcoin halving events due to the need to separate the impact of liquidity, rates, and movements of the U.S. dollar. The report noted that halving the block reward is often seen as a positive development as it increases bitcoin’s “prospective scarcity” and supports its supply/demand dynamics. However, with only three recorded halving events in the past, evidence of how markets react is limited, particularly since the events were “contaminated by factors like global liquidity measures.” The report added that global liquidity appears to have peaked in the near term, and as there are still 9-10 months until the next halving, it is unclear what the effect on bitcoin’s price behavior will be. According to Wall Street firm JPMorgan, retail demand for the largest cryptocurrency is likely to remain strong leading up to the event.

Read more: Bitcoin Retail Demand to Remain Strong Ahead of Halving Event: JPMorgan

Edited by Sheldon Reback.