Analysts at Goldman Sachs are advising clients to temper their expectations for Bitcoin’s growth following the upcoming halving, warning that it should not be compared to market reactions in past cycles.
Read more about the Bitcoin halving in our article
Key Reasons for Caution
- Changed Macroeconomic Environment: Unlike previous cycles, the current global economic landscape features high inflation and interest rates. These factors could dampen the traditional bullish momentum typically seen after a Bitcoin halving.
- Stagnation in Money Supply Growth: In past halving events, the rapid expansion of the M2 money supply by major central banks—including the Federal Reserve, the European Central Bank, the Bank of Japan, and the People’s Bank of China—played a crucial role in fueling bullish trends in the cryptocurrency market. Currently, such expansion is not occurring, which may lead to a less favorable environment for Bitcoin’s growth post-halving.
Goldman Sachs highlights these significant differences as pivotal factors that might lead to a deviation from the expected post-halving surge, suggesting investors approach with caution and consider the broader economic context in their investment strategies.
