Just hours away from the much-anticipated bitcoin halving set for April 19, it’s fair to say that the asset has been on a roll lately despite some pre-halving volatility. A confluence of factors has helped push bitcoin higher following a disastrous couple of years for the cryptocurrency ecosystem.
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The Securities and Exchange Commission’s Jan. 10 approval of spotbitcoin exchangetraded funds has not only attracted enormous interest and asset flows but has added some legitimacy to the asset. Meanwhile, bitcoin breached its previous all-time-high record on March 14, reaching $73,750.07.
As of early morning on April 18, bitcoin was at around $63,000, up 110% in the past year, 38% year to date and down 0.3% in the past month, according to CoinGecko.
“Data from previous cycles shows that bitcoin’s price has experienced increased volatility in the lead-up to the halving, and we are seeing a similar trend currently playing out in markets,” said Lucas Kiely, chief investment officer, Yield App. “Over the past week, bitcoin experienced a drop of around 16% to a low of around $60,000.”
He added that historically, it has fallen 10% to 20% in the days following a halving, so further downside in the short term is possible.
So, is bitcoin a buy in April? Take a look at the data and at what experts have said.
The Three Past Halvings: Price Increases of 8,762%, 2,575% and 594%
Experts said that historically, halvings — which happen every four years — have led to price appreciation, adding that this year should not be an exception. Halving means that the number of bitcoins made is cut in half, reducing the rewards for miners. This process is inherent to bitcoin’s protocol, just like the fact that its supply is capped at 21 million coins, and further boosts the asset’s scarcity.
Here’s how past halvings have impacted bitcoin’s price, according to Bitpay.
First Halving, November 2012: 8,762% Increase in Price
- Price at time of halving: $13
- Following year’s peak: $1,152
Second Halving, July 2016: 2,575% Increase in Price
- Price at time of halving: $664
- Following year’s peak: $17,760
Third Halving, May 2020: 594%…
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