Bitcoin halving – what can we expect?

The upcoming Bitcoin halving, a process predetermined by founder Satoshi Nakamoto about 15 years ago, promises to be different from previous times. This phenomenon, which halves miner rewards and thus reduces the creation of new coins, has traditionally led to a rise in Bitcoin value due to reduced supply.

Yet the impact may be less significant this time. Historically, Bitcoin has taken longer and longer to reach new all-time highs after each halving. In 2012, the first halving reduced rewards to 25 Bitcoin per block. This fourth halving will reduce the reward to 3,125 Bitcoin per block. Although the theory states that decreasing supply increases value, the change in supply is now half of what it was four years ago, while trading volumes are ten times greater.

In addition, macroeconomic factors play a significant role in current market dynamics, including the Federal Reserve’s policy on interest rates, rising tensions in the Middle East and the performance of US spot Bitcoin exchange-traded funds (ETFs). These elements could have a greater impact on Bitcoin’s price than the halving itself.

Halving returns have declined over the years. After the halving in 2012, Bitcoin’s price rose 9,583% to a peak of $1,160 within 367 days. The 2016 halving resulted in a price increase of 3,041% over 562 days to $19,660, and the most recent in 2020 saw an increase of 802% to a high of $73,800 over 1403 days.

Some analysts foresee an optimistic scenario for the Bitcoin price. Based on data from the 2012 and 2016 halvings, Bitcoin could reach new all-time highs within the next year, potentially reaching $450,000 depending on how this cycle unfolds. Should the pattern repeat, Bitcoin could rise to $450,000 within a year, or $270,000 if this cycle is more like 2016.

These analyzes highlight the importance for investors not to rely solely on historical patterns, but also to closely monitor current market conditions and economic signals. Navigating the dynamic crypto market requires a sound strategy and in-depth knowledge of both the technical fundamentals and external economic factors.