Why wasn't the halving priced in long before it happened?
In a previous post I showed how the correlation of BTC up moves and the halving may be an illusion since it's simple to look at pretty much anything that's up trended over a 10 yr period, mark in the dates of the halving and they're about as accurate as the correlation with BTC.
BTC has generally up trended over 10 years. To say an event is significant because price was always up 150 days later isn't a solid argument. I've not done the work, but I suspect I could probably "Prove" lunar eclipses lead to BTC rallies using the same criteria. In a 10 yr uptrend, prices will generally be higher 150 days later.
In this post, I want to look at the elephant in the room. Why isn't the BTC halving priced in a very long time before it happens?
People have been telling me the "Only way is up after the halving". Why after?
The halving has two certain properties. We know it is going to happen and we know approximately when it's going to happen. So ... why wait? If the market knows it's going to happen and knows it's going to make the price go higher, why would you wait for it? Why not just position yourself before it?
I mean, even when there are events that people are unsure of the action tends to happen before the event. Everyone has heard the saying, "Buy the rumour. Sell the news". So why would something that has 100% certainty of happening be something where people "Buy the news"?
Should the halving not have been priced in months ago? We could price in all the halving to come today. Wouldn't be hard. Why isn't the market doing it?
I think this is a big issue for the halving narrative. The other side of the debate here I suspect would want to point out that the halving has a slower longer term effect by reducing the supply. The problem with this is when you argue for this you're arguing for market efficiency. That markets are not irrational - that they're efficient.
And herein lies the problem, because when you say this you're quoting from the school of the Efficient Markets Hypothesis (EMH)s. However, the corner stone of the EMH is that markets know all the available info there is and then they instantly price that in. The market knows everything and everyone acts in their own self interest - resulting in all knowns being priced in.
So you can't really use points to support your narrative from the EMH and then ignore the failure to price known events in long before the fact. What's with the pre-halving crashes? How can they even be possible if everyone knows the market can only go up after the halving? How could that happen in an efficient market?
It makes no sense.
Now, the other side of the debate here would typically cite "Market cycles". Which I'd agree with. The problem for them is when you start to cite market cycles you have to acknowledge that market cycles are something formed from a speculative nature. Market cycles are not efficient. You're moving from efficiently driven markets to behaviourally driven markets.
When you do that, the metrics leaning on the EMH idea are null and void. If we're in a behaviour driven markets price will be driven by things like herding, ideology and emotion. People will do entirely irrational things. Many people make their bets without knowing all the available info.
There's a lot of material you can read on the "EMH verses behavioural markets". Just Google that term if you'd like to learn more. You can find out about it in all mediums from YouTube videos, infographics all the way up to peer reviewed studies. If you read through the ideas of each camp, I think you'll agree the EMH seems less applicable to BTC (And crypto broadly).
So the question is, if the market does not price in the halving long before it happens - isn't this the market telling us it does not think it's important?
BTC has generally up trended over 10 years. To say an event is significant because price was always up 150 days later isn't a solid argument. I've not done the work, but I suspect I could probably "Prove" lunar eclipses lead to BTC rallies using the same criteria. In a 10 yr uptrend, prices will generally be higher 150 days later.
In this post, I want to look at the elephant in the room. Why isn't the BTC halving priced in a very long time before it happens?
People have been telling me the "Only way is up after the halving". Why after?
The halving has two certain properties. We know it is going to happen and we know approximately when it's going to happen. So ... why wait? If the market knows it's going to happen and knows it's going to make the price go higher, why would you wait for it? Why not just position yourself before it?
I mean, even when there are events that people are unsure of the action tends to happen before the event. Everyone has heard the saying, "Buy the rumour. Sell the news". So why would something that has 100% certainty of happening be something where people "Buy the news"?
Should the halving not have been priced in months ago? We could price in all the halving to come today. Wouldn't be hard. Why isn't the market doing it?
I think this is a big issue for the halving narrative. The other side of the debate here I suspect would want to point out that the halving has a slower longer term effect by reducing the supply. The problem with this is when you argue for this you're arguing for market efficiency. That markets are not irrational - that they're efficient.
And herein lies the problem, because when you say this you're quoting from the school of the Efficient Markets Hypothesis (EMH)s. However, the corner stone of the EMH is that markets know all the available info there is and then they instantly price that in. The market knows everything and everyone acts in their own self interest - resulting in all knowns being priced in.
So you can't really use points to support your narrative from the EMH and then ignore the failure to price known events in long before the fact. What's with the pre-halving crashes? How can they even be possible if everyone knows the market can only go up after the halving? How could that happen in an efficient market?
It makes no sense.
Now, the other side of the debate here would typically cite "Market cycles". Which I'd agree with. The problem for them is when you start to cite market cycles you have to acknowledge that market cycles are something formed from a speculative nature. Market cycles are not efficient. You're moving from efficiently driven markets to behaviourally driven markets.
When you do that, the metrics leaning on the EMH idea are null and void. If we're in a behaviour driven markets price will be driven by things like herding, ideology and emotion. People will do entirely irrational things. Many people make their bets without knowing all the available info.
There's a lot of material you can read on the "EMH verses behavioural markets". Just Google that term if you'd like to learn more. You can find out about it in all mediums from YouTube videos, infographics all the way up to peer reviewed studies. If you read through the ideas of each camp, I think you'll agree the EMH seems less applicable to BTC (And crypto broadly).
So the question is, if the market does not price in the halving long before it happens - isn't this the market telling us it does not think it's important?
Surely someone already thought of this before doing all that spamming?