Bitcoin underwent its fourth price reduction on April 20th, causing block rewards to decrease from 6.25 Bitcoins to 3.125 Bitcoins. Historically, these events have been linked to increasing bitcoin prices and the initiation of new cycles, culminating in significant value increases.
Just like every other halving, this most recent one occurred despite Bitcoin hitting a new record high of over $73K prior to the event.
Previous Halvings Cycles
In November 2012, the first reduction of Bitcoin’s supply took place, which was a significant turning point for the most well-known cryptocurrency. At that moment, Bitcoin was worth only $12.50. After the block size reduction, its value began to gradually increase, but the substantial growth occurred in 2013. Approximately one year later, on November 29, 2013, Bitcoin reached an astonishing peak price of $1,163 – a remarkable 93x increase from its worth during that pivotal moment.
In July 2016, during the second cut in bitcoin production, the digital currency was valued at $638.51. Unlike the initial event, bitcoin swiftly rebounded with a robust upswing. The value escalated dramatically, peaking at an unprecedented price of $19,333 on December 15, 2017. Consequently, this rapid increase translated into a substantial profit for investors, amounting to a thirtyfold return from the bitcoin price right after the halving event.
In May 2020, during the economic turmoil caused by the COVID-19 pandemic, Bitcoin underwent its third reduction in new supply (halving). Surprisingly, despite the difficult conditions, Bitcoin’s price reacted positively, increasing from $8,475.00 at the halving to a record high of $68,982.20 on November 10, 2021. This significant rise represented an eightfold increase in value since the halving event.
One key observation is the diminishing returns in each subsequent halving.
This chart shows $BTC price performance after each Bitcoin halving
Generally speaking, a bullish market condition tends to develop and continue for around a year following each halving event. I’d be interested in hearing your perspective on this recurring trend.
— IntoTheBlock (@intotheblock) April 19, 2024
Bitcoin Remains Around $66,000 Post-Halving
Unlike past Bitcoin halving events, the cryptocurrency reached a new high of over $73,000 on March 12 – before the fourth halving even occurred. Some industry experts argue that the latest halving has already been factored into the price, but the reduced supply following the event remains a significant influence.
Furthermore, the approval of Bitcoin spot ETFs in the US markets brings about an influx of new investors, broadening the horizons for Bitcoin in the coming years as miners adjust to a dynamic market environment influenced by geopolitical and economic factors.
In the days leading up to it and after the recent halving event, bitcoin’s price remained relatively stable around $66,000 with minimal volatility. Historically, following a Bitcoin halving, there is often a trend of decline before a substantial rebound. However, this pattern typically unfolds over several months rather than weeks or even days.
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2024-04-23 16:32