Ecoinometrics - Is the Bitcoin halving narrative dead?

Probably yes.

Scarcity, reduced issuance, supply shock and the halving were a big part of the narrative in the last bull market. But with the returns of this halving cycle failing to live to the expectations of the previous years things might be different next time the big trend shows up. So is the Bitcoin halving narrative dead?

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Is the Bitcoin halving narrative dead?

Let’s go back in time just a little. The year is 2020. The month is May. Bitcoin is trading around $9k following a full recovery from the COVID crash. People are wondering whether or not the halving is priced in. 

Around that point in time I started publishing the chart below.

The blue zone shows the expected region the price trajectory of Bitcoin will follow after the 3rd halving if BTC experience similar growth as in the previous cycles. The vertical axis is in log scale. You can see different valuation levels in red based on Bitcoin matching the market cap of Apple, physical gold or hitting the target of one of the stock-to-flow models. The actual trajectory so far is in orange.

Needless to say, reality fell quite short of the expectation.