As Bitcoin approaches its fourth halving scheduled for April 2024, many observers are wondering: will the price of BTC experience another spectacular surge as during previous halvings?
Will the history of previous Bitcoin Halvings repeat itself?
If we look at the history of Bitcoin prices, we see a recurring trend: a marked decline systematically precedes each Halving, paving the way for a future bullish rally.
Thus, at the end of 2012, the price of Bitcoin plunged by 50% a few months before the first Halving. Then, it soared the following year to reach new heights at +11,000%. Same scenario in 2016 with a fall of 40% just before the second Halving, followed by a spectacular surge of +3,000%. Ditto in 2020, where the fall reached 63%, subsequently fueling a powerful rally of +700%.
Currently, after a 20% rebound in 2024, several analysts anticipate a new consolidation below $45,000, a sort of necessary breathing space before a new takeoff. These recurring pendulum movements make it possible to purge the market before it catches fire, driven by increasingly solid fundamentals.
A post-halving bullish dynamic!
After each halving, the halving of the issuance of new bitcoins causes a scarcity of the available supply. Consequence: a spectacular surge in demand and prices.
During the three previous post-Halving cycles, the price of Bitcoin literally soared for 12 to 18 months: +11,000% gains in 14 months after the Halving of November 2012, then +3,000% in 16 months following that of July 2016, and finally +700% in 12 months after the Halving of May 2020.
This explosive dynamic is clearly visible in the following graphs:
- Figure 1: After the 1st Halving in November 2012, the price rose from $80 in May 2013 to $1232 in November 2013. That is +1,440% in 6 months.
- Figure 2: Following the 2nd Halving of July 2016, BTC went from $3,000 to $20,000 in just 5 months. Or +566% gains.
- Figure 3: For the 3rd Halving of May 2020, the price went from $10,000 in May 2020 to $70,000 6 months later. A multiplication by 7.
By extrapolating this trend, some experts, including the famous Plan B, estimate that the next peak could occur between April and October 2025, with an upward potential of up to +400%. By applying the Stock-to-Flow model in the current cycle, the price of Bitcoin could even exceed $200,000.
This is also what the famous Stock-to-Flow trading rule recommends: buy 6 months before the Halving, and sell 18 months after, in order to maximize profits.
In any case, the context seems very favorable. The arrival of Bitcoin Spot ETFs causes massive demand: 14,000 BTC are absorbed every day, or 10x daily production.
Big players like BlackRock are aggressively accumulating Bitcoin. In total, ETF issuers already hold more than 660,000 BTC. The mad race for Bitcoins is therefore in full swing before the next Halving.
With such a buying frenzy and the inevitable contraction in supply, many ingredients are coming together to witness a new historic surge in prices after April 2024.
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