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Bitcoin investors to moderate price expectations post-halving: Glassnode

Bitcoin's halving event may not mirror past price surges, Glassnode reports.

Chart of Bitcoin halving expectations.

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Bitcoin’s upcoming halving has sparked widespread speculation over significant price leaps, but analytics firm Glassnode suggests investors “ground expectations” based on historical data on their “Week On-Chain” report. The halving, a scheduled event that cuts Bitcoin mining rewards in half, has historically influenced price performance, yet Glassnode emphasizes the diminishing returns and shallower drawdowns over time due to the market’s growth and capital flow requirements.

Epoch comparisons reveal a trend of diminishing returns, with the second epoch seeing a price increase of 5315% and a maximum drawdown of 85%, while the fourth epoch had a more modest 569% increase and a 77% drawdown. Glassnode notes the similarity in price performance across the last three cycles before the halving, with increases of approximately 200% to 300%.

Image: Glassnode

The current cycle is unique, having broken the previous all-time high (ATH) before the halving, a feat not recorded in prior cycles. Glassnode’s report also highlights the substantial unrealized profit held by investors at this halving event, with the MVRV Ratio indicating a +126% paper gain on average.

In terms of network fundamentals, the hash rate continues to grow, suggesting increased investment in mining infrastructure. Miner revenues, while showing a diminishing growth rate in USD terms, have seen a net expansion, with cumulative revenue topping $3 billion in the past four years. The realized cap, measuring the capital invested in Bitcoin, supports a $1.4 trillion market cap, having increased by 439% over the last epoch.

Image: Glassnode

Despite the volatility and negative headlines, Bitcoin’s transfer volume over the last four years amounted to $106 trillion, showcasing the network’s capacity for settling transactions without intermediaries.

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