19 days after the April 20, 2024 halving, the price of Bitcoin has still not reacted positively. This event, which only occurs every 4 years, comes in a still fragile crypto context.
However, history shows that previous halvings have consistently propelled the BTC price to new heights. What will happen this time?
A Promising Halving Despite Limited Short-Term Impact
The 4th halving in Bitcoin’s history, which occurred on April 20, 2024, cut mining rewards from 6.25 to 3.125 BTC per mined block. While this event temporarily affected the network’s hashrate, the BTC price did not undergo a significant correction.
Trading around $64,000 at the time of the halving, the Bitcoin continues to hold these levels 17 days post-event. Historically, halvings have always been followed by a strong appreciation of BTC in the medium term:
1st halving (Nov. 2012): BTC price increased by 100X in 1 month
2nd (July 2016): price increased by 30X in 6 months
3rd halving (May 2020): price increased by 8X in 12 months
This trend can be explained by the reduction in the supply of new bitcoins entering circulation, coupled with increasing demand. The increased scarcity of BTC tends to naturally drive up its price.
However, as pointed out by Goldman Sachs in a note to its clients on April 12, it is appropriate not to rely solely on past cycles. The circumstances of 2024 are considerably different, with geopolitical tensions and high-interest rates discouraging riskier investments. This particular situation could mitigate the bullish impact of the halving on Bitcoin’s price.
BTCUSDT chart by TradingView
ETFs, Growth Catalysts for BTC
Beyond the halving dynamic, Bitcoin should benefit from the rise of ETFs. The launch of spot Bitcoin ETFs in early 2024 has given the market a boost, propelling BTC to a new record in March at close to $73,700.
Certain experts, like the CEO of Morgan Creek Capital, believe that the effect of these ETFs is still to come, with potentially 300 billion dollars that could flow from institutional and individual investors. A massive influx of capital that could send the bitcoin price soaring to between $120,000 and $150,000.
In conclusion, although the recent halving has not led to an immediate price spike, Bitcoin firmly holds above $60,000. If the situation improves, nothing will prevent the queen of cryptos from crowning this halving with new records. The next phase could be explosive!
Related bitcoin assets: $Coinbase Global, Inc.(COIN)$ $Marathon Digital Holdings Inc(MARA)$ $Block(SQ)$ $Hut 8 Mining Corp(HUT)$ $MicroStrategy(MSTR)$ $CME Bitcoin - main 2405(BTCmain)$ $Invesco Galaxy Bitcoin ETF(BTCO)$ $BIT Mining(BTCM)$ $WisdomTree Bitcoin Fund(BTCW)$ $Grayscale Bitcoin Trust(GBTC)$ $Fidelity Wise Origin Bitcoin Fund(FBTC)$ $iShares Bitcoin Trust(IBIT)$ $ARK 21Shares Bitcoin ETF(ARKB)$ $Bitwise Bitcoin ETF(BITB)$
Comments