The Bitcoin Halving is almost here, bringing with it the most important event ever in the Cryptocurrency market. Each event had a dramatic impact on supply, demand and price increases after halving. But with Bitcoin price already setting a new all-time high for the first time ever before the halving, how might this change the post-halving performance? Let’s take a closer look.
What is the Bitcoin Halving?
The Bitcoin Halving is a recurring event that occurs approximately every four years. By design, it is intended to increase the scarcity of BTC and strengthen the security of the network. However, this has the unintended effect of bringing more participants, speculation and volatility to Crypto markets, driving Bitcoin price to astronomical new highs.
Currently, miners unlock around 900 new BTC every day while contributing to the security of the Bitcoin network. After the next halving, it will be reduced to around 450 new BTC every day. This sudden change in supply, coupled with growing demand, is often an event that needs attention, as the following data will reveal.
Previous post-halving performance examined
The first ever Bitcoin halving took place on November 28, 2012. BTCUSD was trading at around $10. Within one year, 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 paid attention to the impact the halving had on price action.
The second halving took place on July 9, 2016, some four years later. Cryptocurrencies were still relatively unknown at this time. However, new altcoins began to gain traction and the industry around Bitcoin began to develop. 16 months later, BTCUSD has risen from $570 at the July 2016 halving to just under $20,000 per coin, representing a 3,400% post-halving performance.
By the third halving, which occurred on May 11, 2020, the world began to understand the correlation between BTCUSD performance and the proximity of the halving event. The halving happened just months after the COVID pandemic and unprecedented money supply expansion, creating a perfect storm for Bitcoin and investors. Within a year, Bitcoin rose from under $9,000 per coin to over $65,000 per BTC. Although significant in USD terms, this was only a 625% gain compared to 3,400% and 10,000% previously, setting the stage for diminishing returns.
Why the 2024 Bitcoin Halving May Be Different
The Bitcoin Halving in 2024 is pegged for mid-April, and is already set to be the most important event in Crypto history. While the phrase “this time is different” is considered the most dangerous in investing, this time, when it comes to Bitcoin, things are very different from the past.
Despite the enormous bull markets that follow each halving, none of these rallies set a new all-time high beforehand. In 2024, Bitcoin has already set a new all-time high, which could mean either further declining performance, or a shocking rally that surprises the masses and only further adds to the price tag of each BTC.
With each Bitcoin Halving, the market participants became increasingly aware of its powerful impact on price appreciation. The halving is a publicly known event, and in 2024 the post-halving performance by so-called smart money, whales and institutional investors, who are aware of the types of gains that are possible, could have been at the forefront.
Whether or not this means less performance after the halving remains to be seen. However, the reduction in new BTC available to miners should still affect the delicate balance of supply vs. demand in favor of more price appreciation coming after the event.
Factors fueling increased profit potential in Crypto
The rise of spot Bitcoin ETFs in the United States is one of the main factors driving the new price record before the halving, and could further ignite a post-halving bull market. Spot Bitcoin ETFs have absorbed as much as 10 times the new supply from miners, and after halving could increase to 20 times the new available supply if ETF demand remains consistent.
Combined with demand from retail investors hearing about the halving in the media and in social circles, price could still rise significantly, even though Bitcoin is currently trading above previous all-time highs from 2021 at $68,000 per coin.
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Closure
The Bitcoin Halving is a highly anticipated event that has historically led to significant price appreciation and volatility in the Cryptocurrency market. With Bitcoin already setting new highs ahead of the 2024 halving, the post-halving performance could be even more impressive than previous cycles. Traders looking to capitalize on these market movements should consider using PrimeXBT’s Crypto Futures platform.
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Disclaimer for Uncirculars, with a Touch of Personality:
While we love diving into the exciting world of crypto here at Uncirculars, remember that this post, and all our content, is purely for your information and exploration. Think of it as your crypto compass, pointing you in the right direction to do your own research and make informed decisions.
No legal, tax, investment, or financial advice should be inferred from these pixels. We’re not fortune tellers or stockbrokers, just passionate crypto enthusiasts sharing our knowledge.
And just like that rollercoaster ride in your favorite DeFi protocol, past performance isn’t a guarantee of future thrills. The value of crypto assets can be as unpredictable as a moon landing, so buckle up and do your due diligence before taking the plunge.
Ultimately, any crypto adventure you embark on is yours alone. We’re just happy to be your crypto companion, cheering you on from the sidelines (and maybe sharing some snacks along the way). So research, explore, and remember, with a little knowledge and a lot of curiosity, you can navigate the crypto cosmos like a pro!
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