FX.co ★ Co-founder of Ethereum says halving does not affect BTC price

Many crypto enthusiasts believe that halving significantly affects the value of digital assets. Nevertheless, the co-founder of Ethereum, Vitalik Buterin, thinks otherwise. He argues that halving may have very little effect on the Bitcoin price.

Calculations indicating the correlation between BTC and the halving are based on the Stock-to-Flow (S2F) model. It is used to identify the lack or excess of an asset in the market. The Stock-to-Flow (S2F) model is a formula that calculates the current supply of a particular cryptocurrency divided by the newly issued assets over a certain period.

At the same time, Buterin noted that any movement in BTC price during the halving period is associated with the reduction in block rewards. He also stressed that BTC price reached its peak of $20,000 between halvings in 2016 and 2020.

The last BTC halving took place more than a month ago. Currently, its price exceeds the figure set in May by less than 5%. According to analysts, within a month after halving, bitcoin spiked by almost $2,000.

What is more, crypto enthusiast Ricardo Lopez contradicts Buterin's opinion, arguing that the purpose of the S2F model is to show the growth in the value of cryptocurrencies in the period between halvings. He doubts that any model could predict short-term movements in the price of virtual assets. Models like S2F are also unable to foresee political and economic changes in the world arena as well as global force majeure, such as the coronavirus outbreak.