What is Bitcoin Halving?
Bitcoin halving events are defined as events that reduce Bitcoin miner rewards by half, occurring approximately every four years. Bitcoin price charts and previous research show that halving events influence the price of Bitcoin in certain ways that shape the Bitcoin halving cycle.
The Bitcoin halving cycle shows that Bitcoin price movements follow a certain sequence, and are independent of other assets. This has significant implications for Bitcoin's properties, including its risk profile, volatility dynamics, safe haven properties, and hedging properties. For example, Bitcoin must be negatively correlated with the stock market to exhibit safe haven and hedging properties. However, Bitcoin's halving cycle implies independence (no correlation) of stock market movements. Given the predictability of Bitcoin price movements, Bitcoin may exhibit time-varying properties that may not be inherent. Furthermore, given the peculiarities of the three stages in the cycle, there may be certain volatility dynamics specific to each stage. While the Bitcoin halving cycle may impact Bitcoin's safe haven, hedging properties, and volatility dynamics, these findings may have no significance without significant industry and institutional exposure and interest.
