A Look At Post-halving Performance

The Bitcoin Halving is almost here, bringing about the most significant event in the Cryptocurrency market ever. Each event has had a dramatic impact on supply, demand, and price appreciation post-halving. But with Bitcoin price already setting a new all-time high before the halving for the first time ever, how might this change post-halving performance? Let’s take a closer look.

What is the Bitcoin Halving?

The Bitcoin Halving is a recurring event happening approximately every four years. By design, it is intended to increase the scarcity of BTC and strengthen the security of the network. However, it has the unintended effect of bringing more participants, speculation, and volatility to Crypto markets, driving Bitcoin price to astronomical new highs.

Currently, miners unlock about 900 new BTC each day while contributing to the security of the Bitcoin network. After the next halving, this will be reduced to roughly 450 new BTC each day. This abrupt change in supply, coupled with growing demand is often an event worth paying attention to, as the following data will reveal.

Past post-halving performance examined

The first ever Bitcoin halving occurred on November 28, 2012. BTCUSD traded at around $10. Within one year, Bitcoin price climbed by nearly 10,000% to over $1,200 per coin. At this point, the top Cryptocurrency was still in its infancy, and few paid attention to the impact the halving had on price action.

The second halving took place on July 9, 2016, some four years later. Cryptocurrencies were still relatively unknown at this point in time. However, new altcoins were starting to gain traction and the industry surrounding Bitcoin begane to develop. 16 months later, BTCUSD rallied from $570 at the July 2016 halving to just under $20,000 per coin, representing a 3,400% post-halving performance.

By the third halving, which took place on May 11, 2020, the world had started to realise the correlation between BTCUSD performance and the proximity to the halving event. The halving happened just months following the COVID pandemic and unprecedented money supply expansion, resulting in a perfect storm for Bitcoin and investors. Within a year, Bitcoin soared from under $9,000 per coin to more than $65,000 per BTC. Although this is substantial in USD terms, this was only a 625% gain compared to 3,400% and 10,000% previously, setting the precedence for diminishing returns.