Halving already priced into the Bitcoin price - loss of the price driver and profit-taking could weigh on prices

The fourth Bitcoin halving is expected to take place on 20 April. The reward that "miners" receive for mining bitcoins will be halved. The decisive factor for each halving is the achievement of 210,000 new blocks for the Bitcoin blockchain - this is the case roughly every four years. The halving serves to regulate the total number of Bitcoin, which is set at just under 21 million according to the Bitcoin Code.

Hartmut Giesen, responsible for business development fintech, digital partners and crypto/blockchain at Hamburg-based Sutor Bank, does not expect the halving to cause any major jumps in the Bitcoin price in the short term. "The halving is already priced into the current Bitcoin price as a speculative driver. The price could even fall in the short term as a result of profit-taking, as the main price driver will then disappear," says Giesen.

The prices of other cryptocurrencies are likely to follow the Bitcoin price. "As the price development of cryptocurrencies is still highly correlated, the reaction of Bitcoin will also have a signalling effect for other cryptos," explains Giesen. There could still be exceptions with meme coins or other outliers.

Higher demand meets tighter supply - no new crypto winter in sight

In the medium to long term, Hartmut Giesen expects the Bitcoin price to rise: "Higher demand from Bitcoin ETFs and generally simplified accessibility will meet with a scarcer supply after the halving. Demand already exceeds the daily mining of Bitcoin."

Hartmut Giesen does not see a new crypto winter on the horizon, but the Bitcoin price will continue to develop cyclically. After the Bitcoin ETFs and the upcoming halving, he believes there are no immediate new speculation drivers. "When demand subsides because all interested investors have bought their Bitcoin ETF shares, the current cycle should end," explains Giesen. Provided there are no negative trigger events similar to the FTX bankruptcy or another interest rate hike, the crypto expert believes that demand could run out in the next 12 to 24 months. This corresponds to the duration of the last cycles.

However, Giesen sees another crypto winter more as a new opportunity. "So far, prices have risen to a new record high after every cycle. Future positive triggers after the next down could be an increasing adaptation of blockchain technology or a further shortage of Bitcoin supply due to the next halvings," says Giesen.

Investments in Bitcoin not for speculative reasons

In Hartmut Giesen's opinion, those who are only looking for short-term gains should not invest in Bitcoin because of the halving - an investment horizon of a few years is the minimum for investments. The same also applies to other cryptocurrencies. "You should take a close look at the business models behind the cryptocurrencies to see whether you think they are plausible and have strong growth potential. Then you can get in. In terms of long-term asset accumulation, you shouldn't get in on the basis of short-term speculative expectations," explains Giesen. Now is only the right time for "risk-averse gamblers".