the impact of the bitcoin halving in 2024

Every four years, the crypto market undergoes a major change known as the “halving”. This is a period when the rewards for mining bitcoin are halved. This event has a major impact on the amount of new bitcoins entering circulation, which increases the scarcity and often the price of bitcoin. Today the fourth bitcoin halving took place, but what will the effect be on the price of bitcoin?

What does the halving mean for bitcoin?

The 2024 halving is attracting significant attention from industry leaders, who are sharing key insights into its impact on trading strategies and the broader investment landscape.

John Patrick Mullin, CEO of MANTRA, a blockchain for real assets, discussed the immediate consequences of the halving in an interview. He predicts that the sudden reduction in block rewards will lead to more market volatility.

“Short-term traders should prepare for this volatility after a halving,” says Mullin. “The reduced rewards could lead to immediate market reactions, which traders can use to make quick profits or limit losses.”

Mullin also emphasizes the importance of keeping an eye on the hash rate and miner activity, as a drop in this could indicate a capitulation of miners, potentially leading to a temporary drop in the price of bitcoin.

Long-term strategies after the bitcoin halving

Nash Lee, co-founder of decentralized exchange MerlinSwap, has a different view for long-term investors. Despite the short-term fluctuations, the significant price increases that historically follow halving events should be important in their considerations.

“The decline in bitcoin supply can naturally lead to price increases, providing a strategic opportunity for long-term investors to increase their bitcoin holdings, especially compared to other altcoins that may be more volatile,” Lee explains.

Looking back at previous halvings

Looking back at previous halving events gives us a broader perspective on possible outcomes. During the first bitcoin halving in 2012, the price rose from $12 to $1,242—significantly by 9,937%. The 2016 halving showed a similar positive trend, with the price rising from $664 to $19,804. The most recent halving in 2020 saw the price start at $8,571, with a peak eventually reaching $68,997.