As a 'Different' BTC Halving Closes In, Here's What the Industry Predicts When analyzing the past data and spikes, the price of BTC has touched an all-time high post the halving events. But this time it will be different
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From USD 44,172 on January 1 to USD 62,301.07 on April 19, Bitcoin and its users have had an impressive year so far.
And now, all await the fourth 'halving' event of the cryptocurrency, expected to take place around April 19-20 according to a report by JP Morgan.
A Bitcoin halving (sometimes referred to as 'halvening') is a once-in-four-year event that sees the rewards for mining new blocks being slashed to half. This results in miners receiving 50 per cent fewer bitcoins for verifying transactions. The block reward for miners will be cut from 6.25 BTC to 3.125 BTC.
What difference does it make? "With reduced block rewards, the Bitcoin protocol ensures that the asset remains deflationary through the halving process. In the long term, this supply reduction could attract more institutional and retail capital while amplifying Bitcoin's stock-to-flow ratio," shares Rahul Pagidipati, CEO, ZebPay.
When analyzing the past data and spikes, the price of BTC has touched an all-time high post the halving events. But this time it will be different. Bitcoin has already touched an all-time high of USD 73,835.57 on March 14, 2024 courtesy of the BTC ETF approval which took place in January.
With this year's halving event just a few hours away, market analysts speculate that the price could drop to as low as USD 40,000 post-halving. Markus Thielen, co-founder, 10x Research hinted that the drop could be as low as USD 50,000 to CoinDesk. However, the crypto's price can touch USD 100,000 by June 2024 according to experts, with Standard Chartered suggesting that the price could soar to USD 200,000 by the end of the year.
The quadrennial event takes place once every 210,000 blocks until the maximum supply of 21 million bitcoins has been generated by the network.
Past event analysis
The previous halving events took place on Nov 28, 2022; July 12, 2016: and May 11, 2020. The first event saw the price spike from USD 12 approx to roughly USD 1,132 in a year while the last event saw the price go from around USD 8,500 to peak above USD 67,000.
Based on data, the BTC post-halving price hikes in approximately 18 months.
Industry speaks
"There's a palpable sense of anticipation rippling through the crypto industry, with Bitcoin miners strategically depleting their coin stashes ahead of the reduction in per-block rewards. Data shows a decline in miner-held Bitcoin which signals a shift in strategy towards profit-taking and operational upgrades amidst Bitcoin's recent rally to record highs," shares Jyotsna Hirdyani, South Asia Head, Bitget.
Manhar Garegrat, Country Head, India and Global Partnerships, Liminal Custody Solutions feels this event will also have an impact on altcoins and shares his optimism for innovation in the space, "It's worth considering the possibility of new products being introduced into the crypto market. Just as spot ETFs are being launched around the world, innovative financial instruments may emerge in response to the dynamics surrounding the Bitcoin halving offering investors alternative avenues for exposure to digital assets."
Echoes Shivam Thakral, CEO, BuyUcoin, "Observing previous cycles, we may witness a notable decline in BTC dominance accompanied by a surge in interest and investment in altcoins within 12-18 months of the halving."
"The general consensus is that prices should go up because of the supply shock but geo political events such as the threat could cause the market to plunge as it did over the weekend," concludes Rajagopal Menon, Vice President, WazirX.
