“The supply of bitcoin to the market is also largely down to crypto miners but the sector is opaque, with data on inventories and supplies scarce.
If miners sell their reserves, that could put downward pressure on prices.
Knowing what is behind a crypto rally is hard, not least as there is far less transparency about who is buying and why relative to other markets.
The most common reason given for this year's surge is the U.S. Securities and Exchange Commission's January approval of bitcoin ETFs, as well as expectations that central banks will cut interest rates.
But in the speculative world of crypto trading, explanations given by analysts for changes in bitcoin's price can snowball into market narratives that can become self-fulfilling.
WHAT ABOUT PREVIOUS HALVINGS?
There's no evidence to suggest that previous halvings have caused bitcoin's price to rise.
Still, traders and miners have studied past halvings to try and gain an edge.
When the last halving happened on May 11, 2020, the price rose around 12% in the following week.
Later in the year, bitcoin began a sharp rally, but there were lots of explanations - including loose monetary policy and stay-at-home retail investors spending spare cash on cryptocurrencies - for this and no real evidence the halving was behind it.
Reuters GraphicsAn earlier halving occurred in July 2016. Bitcoin rose around 1.3% in the following week, before plunging a few weeks later.
In short: it's hard to isolate the impact, if any, halvings may have had in the past or predict what could happen this time around.
Regulators have repeatedly warned that bitcoin is a speculative market, driven by hype and "FOMO" (Fear Of Missing Out), and poses real harm to investors, even as they simultaneously approve bitcoin trading products.
