Editor's Note: This article comes fromDeep Chain Finance, reprinted by Odaily with authorization.

Editor's Note: This article comes from

Deep Chain Finance

, reprinted by Odaily with authorization.

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People crave causality, and the cryptocurrency market is the exact opposite of what people want — a near-perfect machine of randomness and volatility. Still, the desire for cause and effect has led the mainstream media to construct narratives around possible arbitrary price changes in an attempt to explain why.

"Forbes" wrote: "Bitcoin price rebounds after plummeting at Libra hearing." According to Reuters, a "mysterious order" triggered the start of the 2019 bull market; is the fundamental reason for Bitcoin's recent recovery.

However, even phenomena that have a logical basis can be susceptible to causal exploration. Cryptocurrency enthusiasts generally believe that the block reward halving will lead to price increases. The logic is sound, if miners are making less money, then there should be less sell pressure, and therefore, a reduction in supply should cause a corresponding increase in price.

Litecoin has recently caught the attention of the mainstream media. From a low of $22 in December 2018 to July this year, LTC surged 480% to a new high of $130, becoming one of the few assets to outperform Bitcoin during the Bitcoin bull run, according to publications including CryptoSlate Things attribute the price increase to the upcoming halving, and the data shows we're wrong.

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Research on the price impact of the halving

Seattle-based startup Strix Leviathan designs and operates trading algorithms specifically for the cryptocurrency market.

The researchers analyzed 32 halvings across 24 cryptocurrencies and compared them to overall market benchmarks, assessing each cryptocurrency’s performance before and six months after each halving, and comparing them to those at the same time. Compare cryptocurrencies in the range that have not undergone a halving event.

“The divergence and seemingly random outcomes before and after the halving suggest that the underlying factor driving prices is not a shift in supply and demand dynamics.”

In summary, the researchers concluded:

survive in a noisy world

“We found no evidence that cryptoassets undergoing halving events outperformed the broader market in the months leading up to and following the decline in miner salaries.”

“While this argument is certainly plausible as a logical theory, it is equally possible that we are dealing with an illusion of validity and that the previous bull market was simply the result of rising levels of speculation within the asset class. "

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