What halving is
Every 210,000 blocks (~4 years), BTC's block reward halves. Four halvings have shipped, each cutting new BTC supply by ~50%.
Four spread drivers
1. Volatility
In the 6 months around a halving, 30-day BTC vol often jumps from 30% to 60%+. More vol → more desk risk → wider spread (typically 30–80 bps wider).
2. Liquidity
- Post-halving, institutional bid (ETFs, treasuries) deepens liquidity.
- But strong one-way buying makes counterparty sellers scarce → SELL spread tightens, BUY spread widens.
3. Miner selling
- Miner income halves, some forced to sell to cover opex.
- Concentrated selling helps OTC desks tighten BUY spreads (they like inventory).
4. Policy / macro events
- Fed rate decisions, SEC actions, ETF flows.
- Big events: most desks pause block quotes for 30–60 minutes.
History
| Cycle | BTC 6m return | Avg OTC spread change |
|---|---|---|
| 2016 | +60% | 0.3% → 0.6% |
| 2020 | +90% | 0.4% → 0.8% |
| 2024 | +70% | 0.3% → 0.7% |
Next halving expected 2028 — likely similar pattern, possibly damped by ETF flow.
What to do
- 3 months before halving: scale-in, avoid FOMO weeks.
- 1 month after: highest vol, avoid single big tickets; use TWAP.
- Long-term holders: don't time, dollar-cost average monthly.
- OTC users: maintain a desk relationship — post-halving emergencies get handled faster.
Funshell publishes alerts around major events. Watch the spot rate and weekly recap.
