The Bitcoin The halving is almost here, bringing about the cryptocurrency market’s most important event ever. Each event has had a dramatic impact on supply, demand and price appreciation after the halving. But with the Bitcoin price already hitting a new all-time high before the halving, how could this change post-halving performance? Let’s take a closer look at that.
What is the Bitcoin Halving?
The Bitcoin Halving is a recurring event that takes place approximately every four years. It is purposefully intended to increase the scarcity of BTC and strengthen the security of the network. However, it has the unintended effect of bringing more participants, speculation and volatility to the Crypto markets, driving the Bitcoin price to astronomical new highs.
Currently, miners unlock around 900 new BTC every day and contribute to the security of the Bitcoin network. After the next halving, this will be reduced to approximately 450 new BTC per day. This abrupt change in supply, coupled with growing demand, is often an event worth paying attention to, as the following data will show.
Post-halving performance examined in the past
The very first Bitcoin halving took place on November 28, 2012. BTCUSD traded at around $10. Within a year, the Bitcoin price rose by almost 10,000% to over $1,200 per coin. At this point, the top cryptocurrency was still in its infancy and few were paying attention to the impact the halving had on price action.
The second halving took place on July 9, 2016, about four years later. Cryptocurrencies were still relatively unknown at this time. However, new altcoins began to gain traction and the industry surrounding Bitcoin began to develop. 16 months later, BTCUSD rose from $570 at the July 2016 halving to just under $20,000 per coin, representing a 3,400% post-halving performance.
At the third halving, which took place on May 11, 2020, the world began to realize the correlation between BTCUSD performance and proximity to the halving event. The halving occurred just months after the COVID pandemic and an unprecedented expansion in the money supply, resulting in a perfect storm for Bitcoin and investors. Within a year, Bitcoin rose from less than $9,000 per coin to over $65,000 per BTC. While substantial in USD terms, this was only a 625% gain compared to the 3,400% and 10,000% previously, prioritizing diminishing returns.
Why the 2024 Bitcoin Halving Could Be Different
The 2024 Bitcoin halving is scheduled for mid-April and is already shaping up to be the most important event in Crypto history. Although the phrase “this time is different” is considered the most dangerous thing in investing, when it comes to Bitcoin, this time things are very different than in the past.
Despite the massive bull markets that follow each halving, none of these rallies have set a new all-time high beforehand. In 2024, Bitcoin has already hit a new all-time high, which could mean either further decline in performance or a shocking rally that catches the masses by surprise and only further increases the price tag of each BTC.
With each Bitcoin halving, market participants increasingly took note of its powerful impact on price appreciation. The halving is a publicly known event, and in 2024, post-halving performance could have led so-called smart money, whales and institutional investors, who are aware of the kind of profits that are possible.
Whether this means less performance after the halving remains to be seen. However, the reduction in the number of new BTC available to miners should still impact the delicate balance between supply and demand, in favor of a further price increase after the event.
Factors That Increase Profit Potential in Crypto
The rise of spot Bitcoin ETFs in the United States is one of the key factors driving the new price record ahead of the halving, and could further fuel a bull market after the halving. Spot Bitcoin ETFs have absorbed as much as ten times the new supply from miners, and post-halving this could increase to twenty times the new available supply if demand for ETFs remains consistent.
Combined with demand from retail investors hearing about the halving in the media and social circles, the price could still rise substantially, even though Bitcoin is currently trading above the former all-time highs of 2021 at $68,000 per coin.
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Conclusion
The Bitcoin halving is a highly anticipated event that has historically led to significant price increases and volatility in the cryptocurrency market. With Bitcoin already setting new all-time highs ahead of the 2024 halving, post-halving performance could be even more impressive than previous cycles. Traders looking to profit from these market movements can consider using PrimeXBT’s Crypto Futures platform.
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Disclaimer: The article is for educational purposes only. It does not represent NewsBTC’s views on buying, selling or holding investments and of course investing involves risks. You are advised to conduct your own research before making any investment decisions. Use the information on this website entirely at your own risk.
