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Crypto is about to see a critical moment.

Likely today, bitcoin will undergo a “halving,” which means the amount of tokens rewarded to crypto miners is cut in half.

The event has been on the calendar for years, which in theory suggests there’s nothing here to surprise anyone.

I’ve learned markets are rarely so straightforward.

Let’s unpack.

Tune in: I’ll be joining Carson Research’s chief market strategist Ryan Detrick live on Twitter Spaces at 9:15 a.m. ET — listen here.

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A divided outlook for bitcoin

Some of Wall Street’s mainstays don’t expect the price of bitcoin to surge after the halving event.

In the 12 months after each of the prior three halvings, bitcoin gained 8,069%, 284%, and 559%, respectively.

Goldman Sachs strategists say things are different now.

Here’s what the bank told clients last week:

“Caution should be taken against extrapolating the past cycles and the impact of halving, given the respective prevailing macro conditions.”

The strategists are nodding to the current landscape of high interest rates and sticky inflation.

To them, it may not make sense to expect the history of an asset to repeat if the market it trades within is vastly different.

Both JPMorgan and Deutsche Bank hold a similar view. Investors have known about halving for so long, the thinking goes, that the event is well accounted for, from a price perspective.

Still, halvings of the past didn’t happen on the back of a massive demand surge.

The SEC approved 11 spot bitcoin ETFs in January, and huge interest rushed in from both retail and institutional investors.

All told, the funds have become part of one of the most successful product launches in modern Wall Street history.

Sandy Kaul, the head of digital assets for Franklin Templeton, isn’t so sure the halving resembles either a neutral or “sell the news” event.

On a call last night, she made a far more bullish case than the other strategists.

“Sometimes the market consensus is wrong, and I think this may be one of those times,” Kaul said.

Bitcoin has dipped over the last week to about $60,000. It remains up more than 36% so far this year.

To Kaul, the crypto’s next price swing may come down to the simple economics of supply and demand.

“The halving event is going to reduce the supply of bitcoin coming into the marketplace at a time when these ETFs are still gaining traction and new buyers are coming in,” she said.

“That setup doesn’t change, even as the psychological sentiment is different this time. Fundamentals point to a strong price outlook.”

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