The Bitcoin halving is drawing ever nearer. It’s an event that’s only occurred twice before, and one that’s taken on a quasi-mythical status for Bitcoiners: a preset measure in the crypto code that halves the amount of Bitcoin awarded per recorded block of transactions.

The impending event has driven intense speculation throughout the crypto community. Will cutting the supply of newly-minted Bitcoin in half prompt a massive short-term surge in the cryptocurrency’s price, or perhaps drive a longer-tail rally? Are the effects already priced in? Is it just a lot of hype over something that may ultimately be a blip on the market radar?

“A momentous occasion”

For Catherine Coley, CEO of Binance.US, the halving is a “momentous occasion,” but she cautions that the effects may not immediately make themselves apparent. “It could result in nothing, or could result in longer-tail adoption and a rally out of that,” Coley told Decrypt. “We saw in 2016 that the halving itself was not an instantaneous reaction, but 18 months later we had the largest rally we've seen.”

“That's where my mindset is,” she continued. “There's oftentimes the phrase, ‘Buy the rumor, sell the news’ in markets, where the event itself will be underwhelming, but the effects of it having brought so much attention to Bitcoin will possibly lead to a longer-term rally later on—if anything because of the difficulty of producing more Bitcoin and the attention of more people wanting to access it. Simple supply and demand."

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Coley also stressed the importance of educating newcomers to Bitcoin; search volumes for the halving have surged in recent weeks, suggesting that the event could bring an influx of Bitcoin neophytes to the crypto market. 

"Our doors are open and welcoming to new folks that are trying to get access from dollars into digital assets,” Coley said. “There's preparation to be said about the halving, of just making sure that our users are educated on this, and making sure that it's an event that's on people's calendars to be able to see the reaction of the markets afterwards.”

It’s been nearly four years since the last halving event on July 6, 2016, and it was about four years between that and the original one on November 28, 2012. The last time around, when the mining reward dropped from 25 Bitcoin to 12.5 Bitcoin, the immediate impact on the price of Bitcoin was minimal—but the price skyrocketed down the line. With the next halving expected to happen on May 11, dropping the reward from 12.5 Bitcoin to 6.25 Bitcoin, what happens now?

“We only get a select few of these halving moments, and many of us weren't even in crypto in the last one in 2016,” Coley continued. “So it's worth paying attention to and monitoring the markets for, but like many things in the markets, crystal balls are about the only thing you have to be sure about an outcome.”

The coronavirus factor

The halving sadly coincides with the international crisis that is the coronavirus pandemic. While Bitcoin and the wider crypto market have recovered in large part from the early March financial collapse, it’s a precarious time in the world for some to even spare a thought to the halving—let alone its market impact.

"I think the biggest call to grace that people have been questioning is: Can Bitcoin survive when the rest of the market is in turmoil?” said Coley. “We take for granted the situations where the whole world has to be on lockdown and can be exposed—rich, poor, developing country, emerging market—to something we've not really had in at least this last 50 years of technological advancement. We've really put under stress a lot of people's truths, and that I think is probably the biggest stressor is: Does anything matter right now if the halving matters?”

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Coley suggested another way to think about the Bitcoin halving: not of the short-term effects or the potential long-term tail, but as a benchmark for how much the market has progressed since the last halving. It has matured dramatically, with incredible liquidity, derivatives markets, and other signs of immense growth. Even for those who aren’t banking on the halving or looking for a way to take advantage of it, that’s something that any Bitcoiner can appreciate.

“I think as the halving takes place, this is just another notch in the maturation scale,” said Coley. “Now we've completed something within the code that has been written, and upon that, the industry itself has grown quite a lot."

Look out for additional upcoming coverage from our conversation with Catherine Coley.