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From its earliest days, Bitcoin has been demonstrating price patterns that repeat over and over again throughout its history.
It appears they are centered around the halving an event happening in the Bitcoin network every four years.
As another halving approaches in 2024, a few other factors may affect the BTC price this year. Let’s break them down.
What is Bitcoin halving nd why is it historically followed by a price surge
To explain halving, let’s review how the first cryptocurrency works.
Every 10 minutes, new transactions made in the Bitcoin network are organized into blocks.
Miners verify block data and add it to the present blockchain transaction database.
For doing this, they get rewarded currently, one block reward stands at 6.25 BTC.
Halving cuts miner rewards in two. The next halving is expected in April 2024. Once it happens, miners will start getting 3.125 BTC per block.
Historically, mining sparked a BTC price surge within the following year.
After the 2012 halving, Bitcoin’s price skyrocketed from $12 to over $1,000 in late 2013. In 2016-2017, it increased from $650 to nearly $20,000.
Following the 2020 halving, Bitcoin’s price rose from $8,500 to its all-time high of $69,000 in 2021.
Most analysts expect a bull run after the 2024 halving, too. Given the dominance of Bitcoin, post-halving growth phases historically inspire an uptrend in the entire crypto market.
The first cryptocurrency itself is becoming a mature asset and makes fewer Xs from halving to halving but those who manage their funds properly may still make a decent profit.
Halving and the Bitcoin scarcity
Bitcoin was designed to be inflation-resistant in opposition to government-issued money, its supply is limited to 21 million coins in its code.
New Bitcoins enter circulation through miner rewards, and gradually cutting them is the way to decrease emission speed and ensure the scarcity of Bitcoin.
While its supply is limited, the first cryptocurrency boasts an ever-increasing demand from investors.
Proven track record and fundamental characteristics like decentralization and censorship resistance, as well as the ability to serve as a hedge against inflation, increase the number of Bitcoin investors year by year.
Together, these factors ensure a long-term price growth for Bitcoin nd every four years, it is supported by the halving.
We’ve already witnessed some pre-halving price surge…
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