Everyone wants to know whether the Bitcoin halving event has been factored into the price or not. In my opinion, you may be thinking too much about this — of course cutting new supply in half is good for prices. But if you need to dig deeper into economic theory and the Efficient Market Hypothesis, to get the answer.

The Efficient Market Hypothesis (EMH) states that the current price of any asset already reflects all the information people know about that asset. Bitcoin halving is widely known, so the current price already reflects this event. I think this thinking is largely correct.

However, those who follow the efficient market hypothesis miss the point that the market does not know everything about the future. For example, the current price only reflects market speculation about the future demand for bitcoin, which may or may not be correct.

What if the market is wrong? Specifically, if the future demand for bitcoin is higher than what the market is speculating? This is why Bitcoin halving is so interesting in my opinion.

There are two types of sellers in the market: forced sellers and voluntary sellers. For example, in real estate, a person who has to sell their house this month because they lost their job is a forced seller. Most others are voluntary sellers.

Usually, voluntary sellers ask for higher prices than forced sellers. They are more affected by changing market conditions. They will adjust the price they are willing to sell at based on changing market conditions.

In bitcoin, the only forced sellers are the miners. Mining Bitcoin costs significantly and miners need to recoup that cost, so they are forced to sell most of the bitcoin they have mined.

All others are “voluntary sellers.” They only sell if they want to. One thing people often overlook about the Bitcoin halving is the change in the ratio between forced and voluntary sellers for any given demand.

For example: Suppose there is a need to buy 1000 bitcoins per day. Currently, 90% comes from forced sellers, as miners produce 900 bitcoins/day; After the halving, this number will decrease to 450. This change may already be factored into the market price.

But if the market is wrong about future demand or future market conditions, the market after the halving will react differently than the market before the halving due to the higher ratio of voluntary sellers compared to forced sellers. required to meet that need. But literally, sellers voluntarily only sell if they want to, what if they don't want to sell at this price?

This is why I see the effects of Bitcoin Halving so positive. I think the market has underestimated the long-term demand for bitcoin, and I like the idea that the excess demand must be from people who don't need to sell.

Read more cryptocurrency market news at: https://tintucbitcoin.com

👍 Follow @TinTucBitcoin 🔥 Like 🔥 Comment 🔥 Share 🔥 Thank you so much 💯💯

#tintucbitcoin #BitcoinHalving #Bitcoin(BTC) #HalvingwithBinanceVN #btc