Bitcoin’s halving events, which occur every four years, have traditionally been followed by bull runs in the crypto market that lead to new all-time highs for Bitcoin. However, is the halving the right time to invest in the world’s largest cryptocurrency? According to Vetle Lunde, a senior analyst at K33 Research, historical Bitcoin price data suggests that halvings can be a great time to buy for investors with longer time horizons.
On February 28, Bitcoin broke the $60,000 mark for the first time in over two years, 47 days before the halving. Since then, the price of Bitcoin has increased by 30% in the past week.
The halving event reduces the rate at which new Bitcoin is issued into circulation every four years. Once 21 million coins are created by the year 2140, there will be no more new Bitcoin produced, making the halving event significant.
According to Bryan Legend, investor and CEO of Hectic Labs, the period leading up to the halving can be a profitable time to hold Bitcoin. The recent rally to $67,611 was largely driven by record inflows into new spot Bitcoin exchange-traded funds (ETFs) in the United States. Bitcoin accounted for 94% of the inflows, with U.S.-based funds dominating the market.
Sergei Gorev, a risk manager at fintech platform YouHodler, believes that Bitcoin ETF inflows are a significant factor in the current rally, along with the anticipation of the halving.
While Bitcoin typically sees a price rally leading up to the halving, there is usually a consolidation period immediately after the event, according to Lunde. However, he expects this correction to be brief before Bitcoin resumes its rally to new all-time highs.
According to Bryan Legend, Bitcoin’s end-of-year price could range from $80,000 to $85,000 in the worst case scenario, and $120,000 to $130,000 in the bullish case. This will depend largely on macroeconomic conditions.
It’s important to note that this article does not provide investment advice or recommendations. Investors should conduct their own research and analysis before making any investment decisions.