What is the impact of the halving on Bitcoin’s price?

The miners are not driving Bitcoin’s price

Bitcoin entered its fourth halving cycle on April 20, 2024. The supply of new coins coming from the miners is half what it was last week. And that makes Bitcoin's stock-to-flow ratio twice as large as that of gold.

What effect should this have on the price? Should it have any effect at all actually?

Here is my take on the question.

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What is the impact of the halving on Bitcoin’s price?

The takeaway

The stock-to-flow ratio of Bitcoin is much larger than that of gold. Based on that you might want to say that Bitcoin is more scarce.

But the truth is Bitcoin is more scarce than gold period. Always has been. Simply because the scarcity is written in code. 

Now that the stock-to-flow is so high, focusing on the halving i.e. the change in the flow is unlikely to tell us much about the price action. Gone are the days where the miners had an outsized influence on Bitcoin’s price.

This cycle is going to be driven by macro and the ETFs more than anything else. That’s what is worth paying attention to.

Bitcoin has always been scarcer than gold