Behind Bitcoin Halving 2024: Insights, Trends, and Speculations

As the Bitcoin (BTC) halving 2024 is getting closer, BTC investors are already anticipating what effect the halving will have on the coin. As reported by Coindesk, Coinbase explained in an analysis what the forthcoming halving will have on BTC. The exchange platform provided a historical perspective that suggests a correlation between halvings and major price appreciation.

The Bitcoin halving is an event that happens every four years. The last event was in 2020, which reduced the BTC mining reward to 6.25 per block. This event is known to reduce the supply of BTC, hence increasing demand, which ultimately increases the value.

According to the research, the BTC price exhibited a huge spike both before and after the last halving event. It surged up to 61% six months before the event and an even more impressive 348% in the six months following the event.

While these statistics may seem enticing to investors and speculators alike, traders and investors in the coin need to be aware that there is no definitive evidence to suggest that the halving directly causes Bitcoin price to rise. Instead, the cryptocurrency’s performance is influenced by a complex interplay of various economic and market forces, including but not limited to the halving itself.

For instance, the exchange platform attributes a portion of Bitcoin’s success during the previous halving in 2020 to the prevailing economic conditions at the time, characterized by loose monetary policies and substantial fiscal stimulus measures implemented in response to the COVID-19 pandemic. These factors, combined with the halving event, may have contributed to the asset’s bullish momentum. During this period, the price of BTC moved from $3,900 as of March 2020 to $42,000 around December of the same year, which is about 977.843%.

Recent Trends: The 2024 Bull Run and SEC’s Approval

This price surge showcases various factors that could affect the Bitcoin price. This year, the price of the BTC has also been on an upward trend, and the factors behind this spike could be said to be the approval of the first ever spot bitcoin ETFs by the SEC, which has enabled investors to have more access to the coin through these financial instruments.

Since the approval of the BTC ETF in January this year, the price has moved from $42,189 to its current price of $67,000, which is about 59.306%. It could be recalled that at some point the price of the coin even spiked up to $73,0000 before the reversal to its current price, signaling bullishness so far this year.

The Coinbase report further draws attention to the behavior of long-term Bitcoin holders, often referred to as “hodlers” within the crypto community. It revealed that the current amount of BTC held by long-term holders is relatively high compared to historical levels, which could potentially reduce the available supply and exert upward pressure on prices during the halving.

While acknowledging the potential impact of the halving, Coinbase ultimately concludes that predicting Bitcoin’s future price movements remains a speculative endeavor. The exchange cautions against relying solely on the halving as a predictor of market performance, emphasizing the importance of considering a multitude of factors that can influence the asset’s trajectory.

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