Halving Effect and the Dual Impact on Macroeconomics

The "Halving" effect of Bitcoin is not only the emotional impact brought about by scarcity, but more importantly, its substantial effect on mining costs. After the halving, the same hash power can only produce half the amount of Bitcoin, which directly leads to an increase in mining costs.

Due to the psychological expectations of miners and the sunk cost effect, the overall computing power of the Bitcoin network may not decrease with the Halving, and may instead increase. This means that the production cost of Bitcoin will significantly rise, further driving up its price. This explains why the peak of Bitcoin's bull market usually occurs more than a year after the Halving.

However, it is not enough to focus solely on the Halving effect. Historical data shows that Bitcoin's bull market cycles are closely related to the macroeconomic policies of the United States, especially monetary policy.

Observing the past few rounds of bull markets, we can find some interesting patterns:

1. The halving of Bitcoin usually occurs 12-18 months before the price peak.
2. There is also a delay of 9 to 22 months between the peak growth rate of the M2 money supply in the United States and the peak price of Bitcoin.
3. There is an astonishing fixed interval of about 12 months between the U.S. presidential election and the peak price of Bitcoin.

These phenomena suggest that Bitcoin's design may have taken into account the policies and economic cycles of the United States. During U.S. election periods, there is often a relatively loose monetary policy, which provides ample liquidity for speculative markets.

Looking to the future, although certain cryptocurrencies have performed poorly during recent Halvings, this does not mean that the next Halving of Bitcoin will be ineffective. The Federal Reserve will eventually begin to cut interest rates, and the liquidity of the US dollar will eventually loosen again. However, considering the current economic environment, the next bull market may arrive slightly later than expected, possibly postponed until around 2026.

For investors, it may not yet be the best time to buy the dip. We need to closely monitor the Federal Reserve's policy signals, especially the two key turning points of stopping interest rate hikes and starting rate cuts. Even when these turning points occur, the market reaction may not be immediately optimistic, as the effects of high interest rates are still ongoing.

Overall, while there may be opportunities in certain small cryptocurrencies in the short term, investors should remain cautious in the long run, especially regarding non-mainstream cryptocurrencies.