Thought of the day:
How could Bitcoin's price appreciation be influenced by its liquidity and halving? Some individuals argue that halving is essential for Bitcoin's liquidity, leading to disagreements. Is it possible for BTC to reach ATH solely through halving while the rest of the market is experiencing a downturn?
In other words, does the UNIQUE property of halving alone make BTC an attractive asset during recession when people are running away from high risk assets?
Will be interesting to see since it wasn't created until after last recession
Yes absolutely agree. However there was one critical thing missing in previous cycles, mass adoption. Itโs still early. The friendly posturing of countries such as Hong Kong and Dubai will bring more users on global scale. We shall see how this turns out but I think the unique feature of halving alone could push the price up.
There are many things that influence price. In a free market, the basic law of economics is a balance between supply and demand. The halving reduces the supply so, all externalities being equal, if demand remains the same, then price will rise. If the same number of buyers are chasing a limited product, there are market participants who will pay whatever premium desired by Sellers to obtain the product. This all makes sense and you probably know it, already. There are other externalities which affect price. In โฟitcoin, there are dozens of risks beyond general market dynamics including: regulatory, tax, jurisdictional, legal, political, Sybil attacks, BIP upgrade errors, user errors, Whale moves, miner capitulation/solvency, kWh rates in energy markets, interest rate changes, sovereign/institutional buying and selling etc. Several of these latter points are related to Liquidity, which is a different matter.
Remember human mind is geared towards FOMO. If price rises due to halving and adoption is still in full swing (which it looks like it is) the price could up easily!
