Bitcoin halving is nearing: What crypto traders should know

Bitcoin's (BTC-USD) halving event is expected to take place this weekend, either Friday, April 19 or Saturday, April 20. Commonly referred to as "the halvening," the halving event operates to reduce the number of available bitcoins in circulation once every four years, directly impacting profits for sections of the crypto landscape such as major bitcoin miners.

Mizuho Securities Managing Director Dan Dolev joins the Morning Brief to discuss what the halving could mean for the price of bitcoin, altcoins, and trading activity on crypto exchanges like Coinbase (COIN).

"The publicity that the halvening has right now is multiples of what it was in the last cycle, and definitely like two cycles ago," Dolev tells Yahoo Finance. "The bitcoin was already fully pricing in its kind of sell-the-news event at this point... Once the event actually happens, there's going to be a running for the exit..."

Want to learn more about the bitcoin halving? Watch this video from Yahoo Finance for a quick explainer: Bitcoin halving: Explained

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Luke Carberry Mogan.

Video Transcript

SEANA SMITH: With Bitcoin's next halving expected in the coming days, many investors are wondering if they will see a similar windfall to the ones that they saw in previous halvings, where Bitcoin's price skyrocketed over the following months. But is this time, is it going to be different?

Let's ask Dan Dolev. He is Mizuho Securities Managing Director. Dan, it's great to see you. So talk to us just about what you think-- at least starting with the halving, before we get to your thoughts more broadly about Bitcoin. But starting with the halving, what kind of impact do you see that having on the price of Bitcoin?

DAN DOLEV: Hi. Thanks for having me. Look, I think this time is-- I think actually this time is different, right? Interest rates are higher. It's sort of third time's a charm. People kind of know it's happening, much more than they did in the prior cycles. And I think all the upside that you saw heading into the last few weeks, pre the downturn, show you that we're kind of already pricing it, fully pricing it in. So I actually expect more downside than upside at this point.

BRAD SMITH: OK. And downside at this juncture, I mean, where else do you think that this could actually transpire and have a broader ripple effect across crypto as well? Because if there is more downside in this event here, then that is going to take some of the enthusiasm out of the rest of the crypto landscape.

DAN DOLEV: 100%. So my concern is mostly with Coinbase, where I have an underperform. And if you think about what happened with Bitcoin, it actually started this whole wave of altcoins. That's kind of a nice way to call them. And they're traded at parity. Or when Bitcoin volumes go up, then the altcoin volumes go up. And Coinbase makes a lot of money off of the altcoin.

So if Bitcoin continues to lose momentum, this is going to drag down all these altcoins. And then eventually, when people start losing money, which they haven't until now, they're going to be more cautious on pricing. And I expect spread, contraction on the retail side to happen. And that's kind of my bearish view on Coinbase. So I agree with the ripple effect. It's going to be pretty bad when it unravels.

SEANA SMITH: Do you think that's going to be immediate, Dan?

DAN DOLEV: I think we're already in it right now. I mean, you saw-- the best example is the last weekend, right? Geopolitical concerns-- Bitcoin was perceived as sort of a safe haven, and it wasn't. It actually traded down significantly on the Israel-Iran situation. So I do think that we're already in this Bitcoin bear market. And it's starting to happen these days.

BRAD SMITH: Dan, how do you see it unraveling? Or how are we in the unraveling right now that you were talking about, especially if we're just coming off of some of these new all-time highs, and the halvening is expected to create even more all-time highs coming off of the typical valuation-- or the typical value moves that we've seen after previous cycles?

DAN DOLEV: Because everyone knows about it now, right? Like the publicity that the halving-- halvening has right now is multiples of what it was in the last cycle, and definitely like two cycles ago. So everyone traded-- or the Bitcoin was already fully pricing. And it's kind of a sell-the-news event at this point. So I don't that-- I think that once the event actually happens, there's going to be a running for the exit.

So that's what I said in this sort of third time's a charm. People have gotten used to it, the anticipation was so big. And people were dreaming the-- drumming on the event. And now it's kind of like heading the other way. So I see this significant sell-the-news catalyst coming in the next couple of weeks. But again, my concern is mostly with Coinbase. Bitcoin is obviously a huge driver of this, so I kind of have to follow what's going on with Bitcoin.