Analysis of the Impact of Bitcoin Halving and Macroeconomic Factors

Halving's Impact on Bitcoin

Many people believe that the main effect of "Halving" on Bitcoin is scarcity, which stimulates people to hoard and speculate. In fact, Halving refers to the halving of the output, that is, the same computational power cost is投入全网, but the number of Bitcoins produced is reduced by half.

If the total network hashrate remains unchanged, the mining cost of Bitcoin will actually increase. Due to factors such as the expected rise in Bitcoin prices and the sunk cost of mining machines, the hashrate of Bitcoin is likely to be higher than before the Halving. This means that the production cost of Bitcoin will increase, and as more high-cost Bitcoins are mined, its price may be pushed to new highs.

Therefore, the logic of Halving driving a bull market not only includes emotional factors but also involves cost factors. However, it is important to note that costs cannot completely determine prices, especially for cryptocurrencies, where it is not uncommon for prices to fall below costs.

Litecoin Halving and the Macroeconomic Environment

Some believe that the performance of Litecoin Halving in 2023 will not be as good as in 2019, which may indicate that this round of Bitcoin Halving will also not be ideal. However, the price peak before the 2019 Litecoin Halving coincides with the beginning of the Federal Reserve's rate cuts, which may not be a mere coincidence.

Macroeconomic Environment and Cryptocurrency Bull Market

Although some cryptocurrency investors are dismissive of macroeconomic factors, the fact is that Bitcoin may have always been influenced by macro cycles.

Observing historical data reveals that the peak of Bitcoin's bull market is linked to certain macro events such as the peak growth rate of the M2 money supply in the United States and the U.S. presidential elections. Satoshi Nakamoto designed Bitcoin to undergo Halving every four years, likely considering U.S. policies and economic cycles.

During the US election period, there is often a relatively loose monetary policy, which can lead to ample market liquidity, and some funds may flow into speculative markets, including the cryptocurrency market.

2025 Bull Market Outlook

The Bitcoin bull market, which occurs once every four years, is influenced by both Halving and macro factors. Although the Litecoin Halving in 2023 performed poorly, this should not overly affect our expectations for the Bitcoin bull market in 2025.

The Federal Reserve will eventually cut interest rates, and the liquidity of the US dollar will shift from tightening to easing. However, due to macroeconomic factors, the bull market cycle may be delayed, possibly extending until 2026. The specific timing is still difficult to predict accurately.

Bottom Fishing Timing

The assessment of the timing for bottom fishing needs to consider the policy direction of the Federal Reserve. Stopping interest rate hikes and beginning rate cuts are two important turning points that may lead to a short-term emotional rebound. However, considering that the M2 money supply in the United States has shown negative growth for the first time, even if the initial phase of rate cuts is still in a high interest rate stage, the market still faces risks.

For bottom-fishing strategies, investors are advised to be patient. In the short term, there may be opportunities in some small-cap cryptocurrencies, but in the long run, a cautious attitude towards non-mainstream cryptocurrencies is still necessary.

Overall, the future trend of Bitcoin will be influenced by multiple factors such as Halving, macroeconomic policies, and market sentiment. Investors need to take these factors into account when making decisions, and remain vigilant and patient.