The trajectory of the cryptocurrency market following the halving will be shaped by macroeconomic factors in the short term, despite its strong fundamentals. This conclusion was reached by Coinbase experts, as reported by CoinDesk.
“These factors are largely exogenous to cryptocurrencies and include increased geopolitical tensions, rising long-term rates, reflation, and growing government debt,” noted company analyst David Han.
In his view, the recent heightened correlation of altcoins with digital gold underscores this, “highlighting the key role of Bitcoin in this space, even as [the first cryptocurrency] strengthens its position as a macro asset.”
While previous halvings have historically sparked bull markets, “these cyclical jumps were often accompanied by other ecosystem catalysts that provide additional tailwinds,” the report states.
“[…] the enduring resilience of Bitcoin and the approval of spot exchange-traded funds have created a bifurcated pool of investors (particularly for BTC): [some] view the first cryptocurrency as a purely speculative asset, [others] as ‘digital gold’ and a hedge against geopolitical risks,” the report’s authors added.
At the time of writing, just over 10 hours remain until the halving in the digital gold network.
Previously, some experts suggested that altcoins may react differently to the reduction in rewards for Bitcoin miners depending on various factors, including tokenomics, value proposition, and overall contribution to decentralization.
Earlier, Binance CEO Richard Teng described the upcoming halving as unique, as it will occur amidst significant events in the cryptocurrency ecosystem.