In a recent discussion, Benjamin Cowen delved into the historical performance of Bitcoin’s ROI post-halving cycles. The CoinSpeech team collected the most important insights from his appearance. The new video by Benjamin Cowen can be found below.
Bitcoin Halving: Expectations vs. Reality
One of the most significant points Benjamin Cowen made was how the market’s expectations often diverge from reality after a Bitcoin halving event. “Everyone expects the price of Bitcoin to go parabolic after,” Cowen noted, but in reality, “history shows that’s actually not often the case except for the first halving.”
Post-Halving ROI Patterns
Analyzing past cycles reveals a contrasting pattern. After the first and third halvings, Bitcoin did not drop below its price at the time of the halving. However, the second and fourth cycles demonstrated post-halving drops. This phenomenon suggests a pattern where “it sort of rotates having Cycles one and three it did not go below the price after the halving having Cycles 2 and four it did,” Cowen explained.
Summer Slump
Another recurring theme is the market behavior during the summer months. According to Cowen, “going into the summer there is a Bounce by Bitcoin… often times we’ll see some form of a boring summer.” He suggests that the market might experience a “summer low right boring phase,” which could potentially extend toward the fourth quarter.
Lessons from 2016 and 2019
Cowen draws comparisons to both 2016 and 2019 to provide possible scenarios for the current cycle. He states, “if you are more so in the 2016 Camp… look at the ROI after the 2016 halving.” On the other hand, the 2019 scenario suggests that we may see “a deeper pullback as well back into the 50s.” He adds a caveat, noting the market’s unpredictability: “there’s no such thing as where it should be.”
Diminishing Volatility
As Bitcoin matures, the volatility appears to reduce over time. Cowen observes, “in the same way that we’ve talked about diminishing returns you’re also likely going to see diminishing volatility… just because it takes exponentially more and more money to move the price.”
Final Thoughts
He wraps up his discussion by emphasizing that while people often anticipate a rapid price increase post-halving, “with the exception of the first halving that’s not what we normally see.”