Investors are eagerly anticipating the upcoming Bitcoin halving event, slated for April 20 or 21, viewing it as a potential catalyst for a price surge, as evident in Bitcoin halving history.
However, according to insights from digital asset exchange Coinbase, the timing of the event coincides with what historically has been a weak period for digital asset markets, potentially dampening its impact.
Bitcoin Halving History And Seasonal Downturn
In its latest market commentary report released on April 5, Coinbase highlighted the significance of the Bitcoin halving event but cautioned that it might struggle to drive prices upward amid the seasonal downturn typically observed in the space during this time of the year.
Historical data analyzed by digital assets research firm Brave New Coin indicates that bitcoin has typically seen a monthly return of approximately 2.7% from June to September since 2011. In contrast, during the other eight months, it averaged a return of around 19.3%.
Despite the anticipation surrounding the halving event, overall volumes have continued to slow down as the market searches for fresh narratives to fuel a sustained rally. Over the last 24 hours, total Bitcoin trading volume recorded a significant 81.42% increase, amounting to $35.9 billion, according to CoinMarketCap data.
Coinbase Identifies Promising Signs
Nevertheless, Coinbase identified promising signs suggesting an influx of new investors into the digital assets market in the near future. The exchange noted bitcoin’s growing acceptance as a digital store of value, akin to “digital gold,” which could attract a new subset of investors amid evolving market dynamics.
Currently, Bitcoin holds a dominant position in the market, with its market capitalization comprising 55.77% of the total digital asset market. Coinbase further emphasized that as more investors enter the market, potential price declines may be met with increased buying activity, mitigating volatility during price discovery.
Coinbase stated:
“We think dips are likely to be more aggressively bought compared to previous cycles, even as volatility persists during price discovery. Bitcoin’s broader access to capital as a result of the launch of US spot bitcoin ETFs could also contribute to dampened volatility (relative to previous cycles) in our view.”
Halving events have historically been associated with significant price spikes in bitcoin. Following the previous halving event in May 2020, bitcoin’s price witnessed a remarkable surge. Commencing at $8,787 during the halving, the digital asset skyrocketed to nearly $69,000 by November 2021, underscoring the potential impact of such events on market sentiment and price action.
Coinbase Wins a Significant Lawsuit
In a separate development, on April 6, the United States Court of Appeals for the Second Circuit ruled in favor of Coinbase in a lawsuit concerning the sale of digital assets on its platform.
The court affirmed that secondary sales of digital currencies on Coinbase do not violate the Securities Exchange Act, dismissing allegations that the exchange was offering and selling unregistered securities.
Coinbase countered the accusations by asserting that secondary digital asset sales did not meet securities transaction criteria, thereby challenging the relevance of securities regulations in this context.
