In 2024, the surge in demand for spot Bitcoin exchange-traded funds (ETFs) by institutional investors and Bitcoin’s strong track record of outperforming during supply-halving events are believed to be the primary factors behind the cryptocurrency’s new all-time highs.
Bitcoin halving, which occurs every four years and reduces miner block rewards by 50%, has historically been associated with bull markets. The price of Bitcoin typically experiences a parabolic uptrend and reaches a peak in the months following the halving. The next halving is expected to happen in approximately 30 days, reducing block rewards from 6.25 BTC to 3.125 BTC.
Looking at past Bitcoin halvings, there is a consistent pattern of the price being lower one month before the halving compared to the time of the halving itself. For example, during the first halving in November 2012, Bitcoin was priced at around $12. However, one year later in November 2013, it reached a peak high of $1,242, representing a more than 10,000% increase. The second halving took place in July 2016, and by December 2017, Bitcoin’s price had surged to an all-time high of around $19,785. During the third halving in May 2020, Bitcoin was priced at $8,730, eventually reaching nearly $69,000 in November 2021.
The reduced supply of Bitcoin entering the market through halving, coupled with constant or increasing demand, tends to drive up the price. This scarcity emphasizes Bitcoin’s value and attracts new investors, leading to increased trader activity.
Crypto analyst Rekt Capital has outlined the “5 Phases of The Bitcoin Halving” based on historical price action. These phases include the prehalving period, prehalving rally, prehalving retrace, reaccumulation, and the final phase of a parabolic uptrend where Bitcoin’s price grows exponentially and hits new all-time highs.
While historical price action may not repeat in the future, the expectation of a bull market could prompt investors to increase their capital flows into Bitcoin. Some analysts predict that Bitcoin’s price could reach the coveted $100,000 mark, especially after surpassing its 2021 all-time high prior to the halving. However, others believe that the halving has already been factored into the price.
Analysts at Bitfinex anticipate that the strong demand driven by US spot Bitcoin ETFs will push Bitcoin’s price above $69,000. Notably, Bitcoin broke its previous all-time high on March 5, 2021, and continued to set new record highs, peaking at $73,835 on March 15.
Peter Brandt, a prominent trader, projects that Bitcoin could reach $150,000 by the fourth quarter of 2025 based on its recent performance.
Quantitative analyst PlanB suggests that the bull market began on March 1, 2021, following an accumulation period. Other market analysts from Deribit and GenesisVol also express bullish sentiments, forecasting a potential price increase of up to 20.8% to levels between $70,000 and $80,000 before the halving.
Bitcoin mining experts also share a positive outlook for Bitcoin’s price post-halving. They expect short-term volatility due to supply shock and reduced inflation rate, similar to previous halvings.
It’s important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research before making any investment or trading decisions.