People know the effect of the halving long before the halving actually occurs. If that is the cause then you would see the effect before the halving.
I debated about that during 2020, whether the halving was priced in, or not. I said the same thing as you, but I was proven wrong by the market. It’s the same as years 2012, and 2016. The price surged after the halving, showing everyone that it was not truly priced in.
As I have already documented, the price surged after a halving only in 2012 (and then again a year later). Other surges were not until at least a year after a halving. Also, people ignore that the 2011 price surge was
before the 2012 halving. Furthermore, the price had risen significantly
before each halving. How is that not evidence that the halving was "priced in"? The surges later do not disprove it.
Interestingly, Litecoin does show this effect. In both Litecoin halvings, the price rose sharply until just prior to the halving. Then, the bubble popped and the price fell sharply, and it continued to fall after the halving.
It’s probably no one really values Litecoin?
That is not true of course, but it shouldn't matter either way. I think that it shows that speculation is much more of a factor in Litecoin because the effect was so strong.
I believe that the actual causes of the Bitcoin bubbles are similar, but more general. News about the halvings or other events generates interest and promotes speculation, which which feeds on itself and slowly evolves into a bubble.
Finally, if we attribute the bubbles to what people believe about the supply and not the supply itself, then the bubbles have little to do with money supply and everything to do with demand.
But the supply itself does reduce after a halving.
Not true. The supply is always increasing toward 21 million before, during, and after a halving. Inflows to exchanges increased after the last two halvings. Supply is not reduced by a halving no matter how you measure it.
