Two Key Trends to Watch Ahead of Bitcoin (BTC) Halving

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Written By Maya Cantina

Contents

  • Post-halving price rallies 
  • Decreasing returns

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The Bitcoin halving, one of the key events of 2024, is expected to happen in just 12 days from now. According to blockchain analytics firm IntoTheBlock, there are two main trends that traders and investors should pay attention to ahead of this much-anticipated event. 

Post-halving price rallies 

As noted by IntoTheBlock, the Bitcoin price has consistently increased after each halving event. 

This was the case due to the reduced rate of new coins that were introduced into circulation by miners. 

Bitwise CEO Hunter Horsley is convinced that the largest cryptocurrency could be on the cusp of having its most impactful block reward reduction to date. This is due to the reduction of supply being significantly bigger in dollar terms compared to previous halvings. 

As reported by U.Today, Ark’s Cathie Wood expects the Bitcoin price to experience a post-halving rally just like it did during previous rallies. In the meantime, Galaxy Digital CEO Mike Novogratz expects the price of Bitcoin to soar to the $100,000 level this year

Decreasing returns

The halving has been pitched as a major bullish catalyst based on historical data. However, as noted by IntoTheBlock, Bitcoin has seen decreasing returns with each halving. Hence, it is reasonable to expect that Bitcoin’s post-halving rally, if it occurs, will be rather modest.  

However, the introduction of Bitcoin exchange-traded funds makes it more challenging to predict how the price of the largest cryptocurrency will behave after the upcoming halving event. On top of a supply shock, the flagship cryptocurrency is also experiencing growing demand due to the success of ETF products introduced by BlackRock and other major firms. Franklin Templeton’s Sandy Kaul believes that such a unique set-up is different from the previous three halving events. Thus, Bitcoin could end up in “uncharted territory.” 

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