In the Bitcoin market, a sensational event is about to take place - Bitcoin halving. This event is believed to have a significant impact on Bitcoin prices and has attracted widespread attention. However, Goldman Sachs recently poured cold water on it, pointing out that past experience should not be used to simply predict future trends. Will Bitcoin halving lead to price increases? This article will explore in depth from various angles to reveal the mystery.

The past two Bitcoin halving events were indeed accompanied by price increases. After the Bitcoin halving in 2012, the price of Bitcoin rose from a few dollars to nearly $1,000; the Bitcoin halving in 2016 made the price of Bitcoin soar to a high of nearly $20,000. This surge has made people look forward to the Bitcoin halving event, believing that a similar market will occur this time. However, Goldman Sachs's view reminds us that the market has undergone earth-shaking changes, and the rules of the past may no longer apply.

Goldman Sachs pointed out that the Bitcoin market has undergone tremendous changes, and all aspects such as market participants, regulatory environment, and investment mentality are different from the past. In particular, as the Bitcoin market gradually matures, investors' awareness of risks has gradually increased, and market volatility may no longer be as severe as in the past. In addition, external factors such as the global economic situation and political events may also have a significant impact on Bitcoin prices. Therefore, even if Bitcoin is halved, it cannot be simply assumed that the price will definitely rise.

In the Bitcoin market, investors are often swayed by emotions. When the market is optimistic, investors tend to follow suit; when the market is pessimistic, panic tends to spread. This emotional investment behavior often amplifies market fluctuations and leads to drastic price fluctuations. Therefore, for the Bitcoin halving event, investors should remain calm and rational, and not be swayed by short-term market conditions. Long-term investment and steady operation are the key to obtaining stable returns.

In general, whether Bitcoin halving can lead to price increases is still inconclusive. Historical data shows that Bitcoin halving events are indeed accompanied by price increases, but Goldman Sachs' warning also reminds us that the market has undergone tremendous changes and past rules may no longer apply. Investors should remain calm and rational, and not be swayed by short-term market conditions. Only long-term and steady investment strategies can obtain stable returns. The Bitcoin market is full of variables. Only through in-depth research and rational decision-making can you be invincible in the market.

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Coin Circle (120btC.coM): The long-awaited "Bitcoin halving" is less than 3 days away. For a long time, people in the currency circle have believed that "halving" and "market trends" are inseparable. The scarcity caused by the expected supply reduction will be beneficial to the rise of currency prices, and Bitcoin is expected to break new highs.

In this regard, Goldman Sachs, a Wall Street giant that has always been skeptical of cryptocurrencies, warned its clients not to interpret the past "halving market" in the past, and "every halving will rise" may just be an illusion. Analysts from Goldman Sachs' fixed income, foreign exchange and commodities (FICC) and equity teams pointed out: Looking back at the previous three halving events, although the price of Bitcoin rose afterwards, there were obvious differences in the time required to reach a new high. Since the overall economic environment at the time of each halving was different, if you want to "learn from the past to know the future", that is, to infer the impact of halving on Bitcoin price trends based on past patterns, you must be more cautious.

The above chart shows the performance of Bitcoin after the halvings on November 28, 2012, July 9, 2016, and May 11, 2020.

In other words, Goldman Sachs believes that investors should not rely too much on past historical performance to predict the future price trend of Bitcoin, because the environment and conditions of each halving may be different, and may also lead to different results.

For example, compared with today's high inflation and high interest rate environment, the M2 money supply of major central banks in various countries at that time - the Federal Reserve, the European Central Bank, the Bank of Japan and the People's Bank of China - grew rapidly, and interest rates in developed countries were mostly maintained at zero or below zero, which stimulated the entire financial market (including cryptocurrencies) to increase risks.

In other words, if you want to see the history of the "halving market" repeat, the overall economic environment must be "powerful enough".

In addition, thanks to the large-scale inflow of funds into the US Bitcoin spot ETF, the price of Bitcoin has risen 50% this year, even setting a record high before the halving. In contrast, in previous cycles, Bitcoin would only reach new highs the year after the "halving" event.

Some analysts therefore believe that most of the "halving benefits" have been realized in advance, increasing the possibility of "selling pressure" after the halving on April 20.

Goldman Sachs said that the significance of the halving event is more like "a reminder" to let investors know that "Bitcoin supply is limited", and Bitcoin's medium-term performance still depends on the money-making power of spot ETFs. Goldman Sachs analysts wrote: Regardless of whether this halving will become a "buy on rumors, sell on news", the impact of the halving itself on Bitcoin's medium-term performance may be small, because Bitcoin prices may continue to be driven by the above-mentioned supply and demand dynamics, that is, the continued demand for spot ETFs, coupled with the self-reflective nature of the cryptocurrency market, which are the main factors determining the trend of spot prices.

Bitcoin halving was once considered a catalyst for Bitcoin price increases. In the Bitcoin system, every 210,000 blocks mined, the mining reward is halved, which is called Bitcoin halving. Historical data shows that Bitcoin's two halving events occurred in 2012 and 2016, respectively, and were accompanied by a sharp rise in prices. This phenomenon is interpreted by some as the inevitable result of price increases caused by a reduction in supply. However, Goldman Sachs' warning reminds us that past performance cannot be simply applied to the future.