As attention is once again drawn, the concept of “halving” has emerged as a crucial factor affecting the cryptocurrency’s value and market dynamics. As a result, many market participants provide their latest bitcoin price forecast.
Understanding the impact of halving on Bitcoin is essential for investors. Bitcoin halving happens every four years. This is an event that halves mining rewards and reduces Bitcoin supply. As a result, the impact is hotly debated, with the leading cryptocurrency usually rising after the event.
What is the price of Bitcoin
After previous halvings, the price of Bitcoin generally did not rise long after. However, it is rare to see BTC make a new high before the event.
Bitcoin hit a new high of over $73,000 last week, although it pulled back above the $64,000 mark over the weekend. Nevertheless, it is now back over $68,000.
For the year to date, Bitcoin is up more than 61%, while in the past 12 months it has risen more than 152%.
Bitcoin halving – impact on price
Speaking to Investing.com, Yuya Takemura, founder of Axys Holding, noted that Bitcoin halving events typically cause the price to rise.
“The next halving in 2024 could follow this trend, possibly causing a significant price increase in 2025,” Takemura said. “Considering Bitcoin’s past performance and increasing adoption, a significant price increase in 2025 is plausible. Factors such as limited supply, growing institutional interest and wider acceptance in payment systems play a role.”
Takemura also acknowledged that the global recognition through ETF approvals, Gen Z’s growing participation and blockchain adoption by authoritative entities could affect the price. However, he cautioned that the Bitcoin market is volatile and susceptible to global economic conditions.
Meanwhile, Menno Martens, a crypto specialist and product manager at VanEck, told Investing.com that “historical trends show that Bitcoin tends to recover before, during and after halving events.”
However, he said, “It should be noted that there are some outliers, for example, Bitcoin also sees significant corrections of over 82% and 80% during the 3rd and 2nd cycle respectively.”
“Bitcoin’s price recovery to previous ATH appears to be faster than previous cycles. Bitcoin’s price is already above the previous ATH, suggesting that this cycle may be different and making a significant correction likely,” Martens warned.
He believes that what sets this particular halving apart is the launch of a Spot Bitcoin ETF in the US market.
“While similar products, such as the VanEck Bitcoin ETN, have been available since 2020, the launch of a Spot ETF in the US is seen by many as a watershed moment for Bitcoin, akin to the IPO of a major asset,” he said. added. “Comparisons are drawn with the effect of ETFs on the gold market, where an eight-year bull run followed the introduction of gold ETFs.”
Furthermore, Martens explains that ETFs play a significant role in market dynamics, holding more than 4.2% of circulating Bitcoin and absorbing a significant portion of newly minted coins daily. As a result, he believes the absorption could intensify post-halving, potentially reducing the available Bitcoin supply for non-ETF investors.
“If demand remains high, as has been observed in recent weeks, this could theoretically lead to significant price appreciation,” he said. “The risk is that Bitcoin could also see significant corrections.”
Bitcoin price prediction
Elsewhere, in a recent research note, analysts at JMP Securities said they believe Bitcoin price could peak at $280,000 within the next three years, driven by expected Bitcoin ETF inflows.
“We estimate that after ~$10B inflows to date, two months after launch, flows from here will actually continue to grow substantially over the next few years as the ETF approval is just the beginning of a longer process of capital allocation,” he said. JMP written.
The investment firm calculates about $220 billion in incremental flows into Bitcoin ETFs over the next three years.
“We estimate a current multiplier of ~25x, which our flow estimate would equate to an incremental $280K per Bitcoin,” they added.
Meanwhile, Bernstein said he is now “more convinced” about his $150K price target for Bitcoin.
“Bitcoin is at $71K today, we expected it to break out after halving. We built Bitcoin institutional flows into our estimates to arrive at Bitcoin price. We estimated inflows of $10 billion for 2024 and another $60 billion for 2025,” the firm explained.
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.
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