Outlier Ventures: Bitcoin's 4-Year Halving Cycle Is No Longer 'Applicable'

The argument from Outlier Ventures comes as Bitcoin is recording its worst post-halving price action ever.

Outlier Ventures published a new report on September 3, asserting that investors should no longer put too much faith in the 4-year Bitcoin price cycle after the world's largest cryptocurrency experienced its worst post-halving rally in history.

Outlier Ventures' head of research Jasper De Maere wrote in the report:

“Four months after the last Bitcoin halving, we are witnessing the worst price action ever.

Halvings have ceased to have a fundamental impact on the price of BTC and other digital assets, as they did in 2016. It is time for investors and project leaders to stop believing into the 4-year cycle of the crypto market as it is now more mature.”

Halving is a unique mechanism of Bitcoin, according to which every 4 years, the block mining reward will be halved to create deflationary pressure on the network, as well as extend the time to increase the total supply of BTC to a maximum of 21 million units until 2140. The most recent halving took place in April 2024, halving the block reward from 6.25 BTC to 3.125 BTC. This is the 4th halving event in history, after the occasions in 2012, 2016 and 2020.

In the past, halvings usually took place about 6 months - 1 year before the BTC price broke out strongly, bringing the crypto market into a new growth cycle and setting a record peak afterwards. Therefore, halving is expected by many crypto investors to open a new phase for Bitcoin in particular and the cryptocurrency market in general, especially after a period of 2022 - 2023 period has seriously decreased due to many crashes.

However, according to data from Outlier Ventures, comparing price fluctuations within 125 days since the halving, BTC in 2024 is decreasing by 8%, while the previous 3 times all grew. Specifically, the world's number 1 cryptocurrency increased by 739% after 125 days since the halving in 2012, 10% in 2016 and 20% in 2020.

The investment fund analyst also affirmed that 2016 was the last halving that had a "fundamental" impact on Bitcoin and the crypto market. However, Mr. Jasper De Maere admitted that halving is still a factor that can affect investor psychology, so it should not be completely eliminated.

However, there are still notable exceptions such as the fact that Bitcoin's price in 2024 set a new ATH peak of $73,840 in March, before the halving took place, breaking the price pattern of previous halvings. This is seen as a consequence of the approval of US BTC ETFs, opening the door for large investment organizations in the US to directly access Bitcoin.

Similarly, Bitcoin after the 2020 halving also grew strongly thanks to external factors such as the COVID-19 pandemic forcing the Fed to pump money to rescue the market, the US Presidential election, or the rise of DeFi projects at that time.

Therefore, it cannot be ruled out that external factors can still affect the price outlook of Bitcoin in particular and other coins in the cryptocurrency market in general in the coming time.

BTC price on September 4 also adjusted to 55,600 USD at times following the general downward pressure of the global stock market, before temporarily recovering to the 58,000 USD area at the time of writing.