The next “halving” of Bitcoin, expected in around 4 weeks, is raising many expectations among crypto investors. This crucial event, which halves the reward for miners, has historically had a significant impact on the price of Bitcoin and the market as a whole. What can we concretely hope for from this fourth halving?
A look back at previous halvings, deciphering past cycles!
The history of Bitcoin is punctuated by cycles of halving of the production of new BTC, commonly called “halving”, which occur approximately every four years. These events, integrated into the very code of Satoshi Nakamoto’s revolutionary invention, aim to control its inflation rate by gradually slowing down the issuance of new bitcoins.
As the market works to decipher the signals emanating from these periodic events, an in-depth analysis of lessons taken from previous cycles is crucial to better understand the next halving and its likely repercussions on the price of Bitcoin and the crypto ecosystem as a whole.
The first halving, which occurred in 2012, reduced the reward for miners from 50 to 25 BTC per block. At the time, Bitcoin was still little known to the general public and only became really popular in 2013, when its price exceeded $1,000. Despite a brutal correction in 2015, Bitcoin demonstrated its resilience in the face of criticism prematurely announcing its end.
The second halving, in 2016, reduced the reward to 12.5 BTC. This event attracted more attention as Bitcoin gained popularity in the financial world. After a period of post-halving consolidation, the price reached new highs at the end of 2017, exceeding $19,000, an increase of more than 12,000% over this cycle.
The third halving, in May 2020, further halved the miners’ reward, bringing it to 6.25 BTC. Despite an uncertain economic context linked to the COVID-19 pandemic, Bitcoin has experienced a meteoric rise, crossing the $68,000 mark for the first time in November 2021.
What does the next Bitcoin Halving have in store for us?
Building on these past experiences, the crypto market is impatiently awaiting the next Bitcoin halving, scheduled for 2024. If history tends to repeat itself, we can expect a significant increase in the price in the months preceding and following the halving. event.
Several factors suggest an upward dynamic. First of all, the growing adoption of Bitcoin by institutional investors and large companies, such as BlackRock or MicroStrategy, reinforces its legitimacy and visibility.
Additionally, the approval of Bitcoin-backed ETFs by regulatory authorities, as was the case in the United States in January 2024, paves the way for greater accessibility for traditional investors.
Furthermore, the macroeconomic context, marked by accommodative monetary policies and fears of inflation, could encourage investors to shift towards uncorrelated assets such as Bitcoin, seen as a hedge against the devaluation of fiat currencies.
However, it is important to remain cautious in the face of market euphoria. Past cycles have shown that post-halving periods can be accompanied by brutal corrections, sometimes destabilizing for investors. Thus, a cautious approach and a long-term vision remain necessary to navigate calmly in this constantly evolving ecosystem.
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