The surge in demand from institutional investors for newly launched spot Bitcoin exchange-traded funds (ETFs) and Bitcoin’s history of outperforming expectations during supply-halving events are believed to be the primary factors behind the cryptocurrency’s recent all-time highs in 2024.
Bitcoin halvings, which occur every four years and reduce miner block rewards by 50%, have traditionally been associated with bull markets. The price of Bitcoin typically experiences a parabolic uptrend and reaches a peak in the months following the halving event. The next halving is expected to take place in approximately 30 days and will reduce block rewards from 6.25 BTC to 3.125 BTC.
The impact of previous Bitcoin halvings on the price of BTC has been significant. Historical data shows that one month before each halving, the price of Bitcoin was lower compared to the price at the time of the halving. For instance, during the first halving in November 2012, the price was around $12. However, one year later, in November 2013, the price had skyrocketed to a peak high of $1,242, representing a more than 10,000% increase.
Similarly, the second halving in July 2016 saw Bitcoin’s price reaching a previous all-time high of approximately $19,785 by December 2017. As for the third halving in May 2020, Bitcoin’s price was $8,730 at the time, but it surged to nearly $69,000 by November 2021.
The reduced supply entering the market through halvings tends to drive up the price of Bitcoin as long as demand remains constant or increases. This reduction emphasizes Bitcoin’s scarcity, which can lead to increased demand and a subsequent price increase. Additionally, the halving event attracts attention to the crypto industry, drawing in new investors and driving higher trading activity.
Analysts have different expectations for the price of Bitcoin following the upcoming halving event. Rekt Capital, a popular crypto analyst, has identified five phases of the Bitcoin halving and expects the price to reach new all-time highs during the “parabolic uptrend” phase.
While historical price action does not guarantee future results, the anticipation of a bull market may lead investors to increase their capital flows into Bitcoin. Some analysts predict that Bitcoin could reach the coveted $100,000 mark, especially after surpassing its previous all-time high in 2021.
Analysts at Bitfinex believe that the strong demand generated by the introduction of spot Bitcoin ETFs in the United States will contribute to Bitcoin reaching its current peak above $69,000.
Peter Brandt, another analyst, has projected that the price of Bitcoin could reach $150,000 by the fourth quarter of 2025 based on recent performance.
PlanB, a pseudonymous quantitative analyst, suggests that the bull market began on March 1 after an accumulation period. Other market analysts, such as Deribit and GenesisVol, also share bullish sentiments, predicting a potential increase of up to 20.8% in Bitcoin’s price before the halving.
Bitcoin mining experts also express optimism about the price of Bitcoin post-halving. They anticipate short-term volatility due to supply shock and reduced inflation rate, similar to previous halving events.
It’s important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research and consider the risks involved before making any investment or trading decisions.