Peter Schiff Tries to Debunk Bitcoin Halving Hype
As the cryptocurrency community braces for the upcoming Bitcoin halving, well-known gold investor and cryptocurrency skeptic Peter Schiff has once again voiced his dissent.
Taking to X, Schiff has argued that the halving, a process that cuts the reward for mining Bitcoin transactions in half, is overhyped. He has pointed to the fact that it merely reduces the growth rate of the new Bitcoin supply rather than the existing supply itself.
The supply of #Bitcoin will not be cut in half by the #Halving. Over ninety percent of the Bitcoin supply already exists. The only thing cut in half is the growth rate of supply. What matters the most is how much of the current supply holders want to sell, not what miners create.— Peter Schiff (@PeterSchiff) March 12, 2024
His comments come amid widespread speculation about the event's potential to drive up the price of Bitcoin, with over ninety percent of Bitcoin's total supply already in circulation.
Understanding the Bitcoin halving
The Bitcoin halving is a significant event in the cryptocurrency world, scheduled to occur for the fourth time on Apr. 19.
This process, occurring approximately every four years, reduces the reward given to miners for processing transactions by 50%.
The upcoming halving will decrease the reward from 6.25 to 3.125 bitcoins per block, a mechanism designed to mimic the scarcity of resources like gold and control inflation.
With the countdown standing at 36 days, enthusiasts and investors are closely monitoring the potential impact on Bitcoin's price, which is currently trading above $72,000.
Schiff’s skepticism toward the previous halving
Peter Schiff has consistently dismissed the positive impact anticipated from Bitcoin halvings.
Leading up to the May 2020 halving, Schiff observed a bearish trend in Bitcoin's price action, despite what he described as bullish global financial conditions for Bitcoin. He criticized the notion that the halving would automatically result in a price increase.
#Bitcoin bugs have been buying in anticipation of the May 12th halving. It's widely anticipated that following the halving Bitcoin’s price will surge. But if by the time the halving arrives those looking to profit have already bought, the halving itself will result in selling.— Peter Schiff (@PeterSchiff) February 19, 2020
Despite Schiff's criticisms, Bitcoin managed to shatter its all-time high in late 2020 and saw significant gains in early 2021, challenging his assertions about the halving's lack of impact.
Contrasting expert opinions
Despite Schiff's skepticism, some experts remain bullish on Bitcoin's prospects post-halving.
Bernstein, a global asset management firm, has predicted that Bitcoin's price could reach $150,000, citing the current bullish market trend and the upcoming halving as key drivers.
Their optimism is also supported by significant inflows into Bitcoin, with substantial investments in Bitcoin ETFs showcasing growing institutional interest.
Bernstein's analysis, which is based on historical data and the profitability margin for miners, suggests that the ball might be in the bulls' court.