Remember in 2016 when people were already talking about how “halvings” could have a big effect on Bitcoin tokenomics and cause another big bull run?

Some people argued back then that there were starting to be too many people talking about it, and if too many people expect it, it wouldn’t happen.

Back then we didn’t have as much data. And some argued that we couldn’t go by just one data point.

But we did end up with a big bull cycle.

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In 2018-2020, we had an even bigger expectation of a halving bull run.

It was talked about even more. This time around, it reached mainstream media. It was mentioned on shows like MSBC. In Forbes magazine and in the Wall Street Journal.

Before the halving even happened, everyone knew about the cycles. And we now had a past pattern.

And this time there was too much expectation. So some argue that if everyone expects it to happen, then it won’t happen. Or that it would be priced in.

But we did have a bull run following the halving and following the same cycles as before.

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What causes these halving rallies?

There are core tokenomic elements, and speculative elements at play.

The key one is at the core of Bitcoin’s tokenomics, and what creates the core value of Bitcoin in the first place.

Every halving, the mining reward for miners gets cut in half.

This is pretty big for Bitcoin, because it’s how Bitcoin starts its intrinsic value for its coin.

Mining has costs, and value for the network. There’s work involved. There’s energy bills. Etc…

And this is all being rewarded by one thing: the mining reward.

If the same mining costs, same value to the network, and same work is now rewarded to every miner with half the Bitcoin, it creates a shock deflationary effect to the tokenomics of Bitcoin.

And since Bitcoin is the dominant crypto, this is a big deal for the entire Bitcoin market.

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On top of that, there is the speculative side.

Bitcoin is still a very speculative market, very emotional, and very volatile.

Bear markets are still very intense with 70%-99% drops for many coins.

And anything that recovers that market, will have an equally intense reaction. Which is why any positive and bullish action, like the halving, can create big rallies.

So this emotional market, will have big overreaction to the effect of the halvings. But also to the reaction of ending a bear market.

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Keep in mind, it’s not all coming from the halving. It’s also the volatility and speculative side. But the halving keeps the volatility cyclical like clockwork.

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Why do bull runs still manage to happen, despite everyone knowing about the halving rally?

Like I just said, it’s a very emotional market.

And as we’ve seen yet again, most people panicked out of crypto during the bear market. Most people were out of position. Following the usual bear cycle.

It’s heavily fear and greed driven.

And during bear markets, the fear is very intense.

So you don’t have enough people staying in the market during bear cycles, to stabilize it, and keep enough people for the next bull cycle to lessen any volatility, and lessen any overreaction in the other direction.

And despite knowing about the halving cycles, there is more fear than reason.

Many people still won’t come back until there is enough greed driving the market again. And that’s when greed starts to spread, and once there is enough confirmation of things being bullish, that’s when everyone FOMOs back in.

And we’ve seen this already happen while halving cycles were already common knowledge.

There is more emotion than reason in this market.

And people keep repeating the same mistakes.

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But won’t macro economics make it different this time?

It’s possible, but there is growing evidence as we’ve seen for the past 3 months, that it’s looking less likely.

Keep in mind that crypto entered its bear market several months before stocks entered their bear market, before rate hikes, before war in Ukraine, before the recession, etc..

So crypto was already in its bear cycle before bad macros. Which gave an impression that crypto was following the economic crisis.

Keep in mind that crypto has more often had a mild correlation to macros and traditional markets. With only brief periods of volatility and panic that had higher correlations. But they never last very long.

And right now, despite bad macros, stocks struggling, banks failing, war, Fed rate hikes, inflation, recession in many countries, we’ve seen several months of crypto rally, in a big way.

So it’s increasingly looking like either crypto is moving faster and looking more ahead, or it simply doesn’t care enough about macros.

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The 6 key elements to make the halving bull run continue to come true:

1- You need to have the mining reward of Bitcoin be cut in half every 4 years.

2- You need for Bitcoin to be the hegemon of the market, and still dominate crypto.

3- You need the market to continue its high volatility, and come out of a big bear market. The halving is the clock for the volatility of the market.

4- You need the market to still believe Bitcoin and crypto have some kind of future, and will still be traded and be around for a while.

5- You can’t have mass adoption.

6- You need markets to still be run by people, and follow human nature. And maybe a touch of self fulfilled prophecy and belief in the halving effect.

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If you got all those elements then the odds of having the usual halving cycles, and the usual market action, are gonna be very high.