Want to invest in bitcoin after halving? What to consider

Over the weekend, bitcoin (BTC-USD) went through its halving event, which is where the reward for mining bitcoin is reduced by half once every four years. With the event came rising optimism in the cryptocurrency space from mining operators, but did it bring new opportunities for those looking to invest in the digital asset?

401 Financial Principal & Founder Tyrone Ross joins Wealth! to give insight into the crypto market and what investors should consider before buying into bitcoin.

Ross offers this advice:

"The halving shouldn't change anything there. It's literally written in the code... it's just going to continue. It's not this special thing or magical event that makes bitcoin any more or less compelling to invest. If you loved it two or three years ago, you should think about loving it now and continuing to learn. With that said, folks that are thinking about getting in, the halving is something that you should learn about and realize... the decrease in supply.. .But some of the other dynamics that are out there with the bitcoin ETFs, the price of running up into an all-time high before this halving, which is the first time this happened. Things like that I think are interesting to learn. And if it would still make sense for you from a long-term time horizon it would make sense to buy then, but not a second before."

Want to learn more about the bitcoin halving? Watch this video from Yahoo Finance for a quick explainer: Bitcoin halving: Explained

For more expert insight and the latest market action, click here to watch this full episode of Wealth!

This post was written by Nicholas Jacobino

Video transcript

BRAD SMITH: Well, Bitcoin completed its halving on Friday, the process that happens every four years. The event helps control the supply and shape of Bitcoin by reducing the mining rewards over time. Now, prices higher on the news, and Bitcoin bulls are pleased to see the upside this morning, as it's up over the past 24 hour period by about 1.4%.

But for those who aren't invested in Bitcoin and looking to get into the crypto market, perhaps, it could be a good time to think about it. For more on this, I'm joined by Tyrone Ross, 401 financial principal and founder to Weigh In. He's got his Bitcoin t-shirt. That's like a la champion logo that we had seen, so in the stylings of that.

Great to see you, Tyrone. Walk us into the thought process that a lot of people should be thinking about with regard to this most recent halving and whether or not it's time to consider adding Bitcoin to the portfolio.

TYRONE ROSS: Key word there is thinking. I think if you were thinking about getting in, you should continue to think about it. The halving shouldn't change anything there. It's literally written in the code, tick tock, next block, as we say, it's just going to continue. It's not this special thing or magical event that makes Bitcoin any more or less compelling to invest in, because if you loved it two or three years ago, you should think about loving it now and continuing to learn.

With that said, folks that are thinking about getting in, the halving is something that you should learn about and realize, and as you mentioned into the lead here, the decrease in supply-- supply and demand, we all know about that, we've heard about that. But some of the other dynamics that are out there with the Bitcoin ETFs, the price of running up into an all time high before this halving, which is the first time that it's happened. So things like that I think are interesting to learn. And then if it still makes sense for you from a long-term time horizon, it would make sense to buy then, but not a second before.

BRAD SMITH: With the amount of supply, it seems like there are going to be halvings-- I believe the year that I saw was into 2140. It's going to far outlive any of us, unless we come across Tony Stark's Arc Reactor between now and then and we're able to exponentially add on to our lifespans. But all those things considered, when you think about the limited supply that is baked in, how much also in advance of having events like this do we see it get baked into the price? And a lot of investors already expecting the event to come about, so them trying to get ahead of what that price action would have been or could have been.

TYRONE ROSS: And on Crypto X last week, there was a lot of argument, as it was in the previous halvings, about is it priced in. Well, yeah, for all intents and purposes, for something that is written in the code and you know it's coming, it's priced in. But if I know every Friday that my parents are going to take me to McDonald's as a kid, it's priced in, I know that excitement is coming. But certain things may change, it may be raining that day, they may be late to pick me up, the French fries might be cold. I still went to McDonald's, so what am I saying here?

Yes, it's priced in, but everyone interprets that information differently. So I think what needs to happen is, yeah, it's priced in, the more you understand and you are close to the selling points with Bitcoin and everything that goes on in crypto, it's easier to get information to make decisions. But I can tell you I am almost 11 years into the space now, the halving was nothing for me. I said this on social media, I think we're going to look back years from now and ask people, well, how many halvings have you held through. I think that's going to be the metric, as opposed to did you buy before or did you buy after it. I don't think that's the thing folks should be looking about if they're looking at this as a long-term addition to their portfolio.

BRAD SMITH: We want to introduce folks to a new term as a result of this halving, as well. And we spoke with Fireblocks CEO Michael Shaulov, who gave us the definition, at least from his perspective, of runes here. And then I want to get your reaction on the other side of this. We're just going to run a clip real quick.

MICAHEL SHAULOV: We'll start seeing more and more players that are able to offer access to a bigger investor base, so essentially both retail and professional and institutional investors. And that probably will-- what would start driving the prices up, both for Bitcoin and other cryptos.

BRAD SMITH: OK, so that was his reaction to what the institutional side is looking for with this new protocol. I would love to know from your perspective what the significance of this runes protocol is, post halving.

TYRONE ROSS: The significance is what you saw for the 100 blocks post-halving, was very interesting to see it on social media, was just the amount of fees that were being paid to the blockchain. It was remarkable to see how much fees increased. And one of the issues that folks have always talked about was when the supply goes away and there's no more Bitcoin to be mined, then what happens for miners. And I think those fees show that there are people that are going to use Bitcoin and willing to pay fees in order to introduce themselves to the security of the base layer and make things immutable.

And runes are just essentially meme coins for Bitcoin. And all that means is that you'll be able to-- and you saw all these funny names for coins that now are going to be introduced on Bitcoin, like it is on other chains like Solana, and Ethereum, and things like that. So it introduces a really interesting dynamic of you can use the Bitcoin blockchain for whatever you want. And you got some Bitcoin maxis who hated it because it clogged blocks. And the miners love it, because the fees are there. But that's the beauty of Bitcoin, it's different things to different people, and no one gets to choose what it is or it isn't.