In the past six months, the bitcoin price has increased from around $4,000 to $8,000, recording a staggering 115 percent year-to-date gain against the U.S. dollar.
Historically, the bitcoin price has tended to recover a year before and after the block reward halving, a mechanism that decreases the rate in which new bitcoin is produced by miners by half.
Grayscale, an investment firm that oversees more than $2 billion in assets under management in products such as the widely utilized Bitcoin Investment Trust (GBTC), sees the halving offering an attractive entry point for investors.
Is bitcoin block reward halving not priced in?
Since its inception in 2009, the block reward halving of bitcoin has been considered a crucial fundamental factor in the long term price trend of the asset.
As the supply of bitcoin in the global exchange and over-the-counter (OTC) market drops, if the demand remains the same or rises, the halving has historically caused the value of the asset to increase.
Considering the importance of halving in the long term trend of bitcoin, Grayscale said in a research paper that it may offer both institutional and retail investors an attractive entry point into the asset class.