Halving hype or historic milestone? Decoding Bitcoin's potential price trajectory in 2024.
The next Bitcoin halving, probably crypto’s second most anticipated event of all time (after January’s Bitcoin ETF announcement) is coming into focus fast with the 2020 vision (the year, that is) for millions of Bitcoin investors with those $100k laser eyes around the world.
With only days to go and BTC back over $70,000, the 4th Bitcoin Halving, scheduled for April 2024 according to CoinMarketCap’s countdown ticker, will slash mining rewards from 6.25 BTC to 3.125 (roughly 900 to 450 new coins per day) and make producing new BTC more expensive than ever.
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Institutions Fueling the Fire
Despite weathering massive high fees-induced outflows from Grayscale and some less than favorable inflation numbers, Bitcoin ETF volume has remained strong in the weeks following Bitcoin's all-time high this year, indicating sustained institutional interest in the world’s first cryptocurrency.
Institutional interest has been the major catalyst in Bitcoin’s revival following BlackRock’s 2023 spot ETF filing announcement and could play a significant role in the price dynamics surrounding the halving event.
Spot ETF inflows continue to rake in hundreds of millions of dollars daily from investors brought in by BlackRock, Fidelity and others. BlackRock and Fidelity alone now hold ~400,000 Bitcoin in spot ETFs for their customers.
Fractal or Fiction? Echoes of 2020
With so much external momentum propelling Bitcoin forward in the final runup to the Halving, some analysts like Reflexitivity Research’s Will Clemente are seeing echoes of 2020, believing that the Nakamoto chain is moving in a similar fractal as December 2020.
It’s hard not to FOMO in hard at this stage.
The Miner's Dilemma
And let’s spare a thought for those poor trapped miners.
CryptoQuant CEO Ki Young Ju this week predicted on X.com that BTC mining costs could double by the end of April, from $40K to $80K for Antminer S19 XPs used by most US miners. While Bitcoin difficulty (now 83 compared to 48 a year ago) will come down as the hash rate drops, it will remain a steep jump and force smaller miners out of business.
Read: Will Bitcoin Mining Remain Profitable After the Halving?
Bitcoin's Halving History: A Repeating Rhyme?
Historical data shows that Bitcoin's price has increased substantially in the year following previous halving events, although the immediate effect on the price can vary and go sideways or down for a few months post-halving, or as @cryptoJelleNL calls it, a “post-bottom consolidation” before it resumes its upward trajectory.
The Three Phases of Halving
Galaxy Research goes a step further, layering each halving cycle’s price chart over one another in order to establish 3 distinctive parts which it calls
- hype (prices surge pre-halving),
- disillusionment (prices dip post-halving)
- and accumulation (prices recover and keep going up).
The Retrace and Re-Accumulation Cycle
RektCapital in his newsletter, sees the same pattern and two distinct movements. There’s normally a Pre-Halving Retrace (blue circle) which changes after the halving to a Re-Accumulation Phase (red circles).
However, another point to support this pattern is that we see similar behavior when Bitcoin hits its old all-time high price areas. As you can see in the green circles, it experiences a lot of volatility both up and down, followed by, you guessed it, a re-accumulation phase.
Considering these historical trends, the recent 20% drawdown over the last few weeks and the subsequent climb again seem to be following the plan so far.
Will History Repeat Itself?
So will this time be the same, or different? Investors and social media influencers have been reading past charts like the tea leaves to back their wild predictions. While past cycles provide insightful clues, they are radically different each time and all their variables should be considered.
The investors that are now piling into Bitcoin are, for the most part, a different breed from the libertarians who did so in 2012-2020. Add more regulatory clarity (Bitcoin’s not a security), more new and mature markets, a dramatically rehabilitated public image, no global pandemic, and it’s a different ball game in 2024.
However, as the saying goes, if history doesn’t necessarily repeat itself, it certainly rhymes.
Taking a Closer Look: Previous Bitcoin Halving Cycles
Let’s take a look at previous Bitcoin halving price actions and the narratives that shaped each one. Then we’ll take a look at the crypto industry’s biggest predictions for Bitcoin during this post-Halving cycle.
The 2012 Genesis Halving
Date: November 28, 2012
Bitcoin Price at Halving: $12.35
The first Bitcoin halving in 2012 occurred during the early stages of Bitcoin's development, just over 4 years after Satoshi Nakamoto published their Bitcoin whitepaper on an online forum for cypherpunks.
While there was a cautiously optimistic sentiment driven by a small group of libertarian enthusiasts and technologists, Bitcoin’s actual adoption remained limited, with very few merchants accepting Bitcoin as payment. Awareness was centered around tech-savvy individuals and online communities, helping Bitcoin's core infrastructure to continue developing, with more nodes and miners adding to its network.
2012 Pre-Halving: 5x from $2.55 to $12.35 (November 2011 - November 2012)
Move along, not much to see here.
Bitcoin's price saw a gradual increase from approximately $2.55 to $12.35, recovering very well from the first Mt. Gox hack in June 2011 in which hackers changed its price to 1c.
2012 Post-Halving: 21x from $12.35 to $260 (November 2012 - April 2013)
Bitcoin's price surged to around $260 in April 2013, shooting up over 2,000% from the halving day price. Increased media attention and public interest likely contributed to the surge in demand, along with the reality of reduced Bitcoin supply.
The 2016 Struggle for Legitimacy
Date: July 9, 2016
Bitcoin Price at Halving: $650
The 2016 Bitcoin halving took place amid growing excitement, despite concerns about security, scalability, and regulatory uncertainty. The cataclysmic 2014 Mt. Gox hack’s devastation was still rippling through the entire sector and Dark Web-related criminal activity gave it a terrible reputation with mainstream media.
Still, adoption continued to expand, with more merchants and businesses accepting Bitcoin payments. Technological advancements focused on addressing scalability and usability challenges, with the Lightning Network gaining traction.
2016 Pre-Halving: 1.5x from $430 to $650 (January 2016 - July 2016)
Bitcoin's price rose from about $430 to $650, reflecting a more mature cryptocurrency ecosystem with increased institutional interest and greater liquidity.
2016 Post-Halving: 30x $650 to $19.5K (July 2016 - December 2017)
Bitcoin entered a phase of exponential growth, reaching nearly $20,000 in December 2017, amounting to a 2984% increase from the halving day price. This surge was driven by speculative trading, the ICO boom, tightening supply, and increasing recognition of Bitcoin as a digital store of value.
The 2020 Pandemic-Fueled Halving
Date: May 11, 2020
Bitcoin Price at Halving: $8,600
The 2020 Bitcoin halving occurred with the world in turmoil as the Covid pandemic brought everything to a standstill.
With the US and European governments pumping trillions of dollars in stimulus spending to prop up their economies and support citizens, Bitcoin with its fixed supply and diminishing emissions soon saw a huge interest from institutional investors seeking exposure to digital assets as a hedge against inflation and economic instability. Adoption reached new heights, buoyed by Elon Musk’s brief patronage and with major financial institutions like PayPal and Square announcing support for Bitcoin transactions and investments.
Technological advancements focused on improving scalability, privacy, and usability, with the development of the Taproot upgrade and the integration of Schnorr signatures, which allowed Bitcoin users to create Ordinals and BRC20, the proof-of-work network’s own version of DeFi and NFTs.
2020 Pre-Halving: 1.5x $5000 to $8,600 (March 2020 - May 2020)
Bitcoin's price recovered from a significant drop due to the COVID-19 market crash, rising from around $5,000 to $8,600. This recovery was influenced by monetary policy responses to the pandemic, leading to increased interest in digital currencies as a hedge against inflation.
2020 Post-Halving: 7.5x $8,600 to $64,000 (May 2020 - April 2021)
Bitcoin's price saw a substantial rally, reaching an all-time high of approximately $64,000 in April 2021. This post-halving period was characterized by a surge in institutional adoption, the launch of various Bitcoin ETFs, and growing interest in DeFi.
2024 Bitcoin Post-Halving Price Predictions by Experts
Here are some of the crypto industry’s best and brightest weighing in with their bullish Bitcoin predictions:
The $150k - $250k Predictions
- Michael Novogratz, CEO of Galaxy Digital, predicts that Bitcoin's price could reach $150,000 by April 2024, based on growing institutional adoption, increasing demand from younger generations, and reduced supply post-halving.
- Anthony Scaramucci predicts Bitcoin will hit at least $170,000 in the 18 months post-halving, based on historical price performance, with Bitcoin tending to quadruple after previous halvings.
- Tom Lee, Managing Partner at Fundstrat Global Advisors, aligns with Novogratz's $150,000 prediction, basing his forecast on market trends, increased demand amid limited supply post-halving, growing interest in Bitcoin ETFs, and Bitcoin's intrinsic qualities.
- Mark Yusko, CEO of Morgan Creek Capital Management, believes Bitcoin could reach $150,000 by the halving, following a path similar to Bitcoin Cash, with less leverage and parabolic price action.
- Adam Back took a bet previously that Bitcoin would hit $100k by 31 March 2024 (but that didn’t happen).
- Uber-bullish Billionaire investor Tim Draper has predicted that Bitcoin will reach $250,000 in 2024, based on the cryptocurrency's potential.
- Bloomberg Intelligence has forecasted Bitcoin to reach $100,000 by 2025, according to their cryptocurrency report.
- Respected analyst Peter Brandt predicted that the price of Bitcoin could go as high as $200,000 by September, a 66% increase from his previous estimate of $120,000.
The Moonshot $1 Million+ Calls
- Cathie Wood's ARK Invest has projected that Bitcoin could surpass $1 million in the long term, as outlined in their Big Ideas report.
- Plan B, a prominent Bitcoin analyst, regularly shares price analyses and predictions on Twitter, ranging from $100,000 to $1 million.
- Robert Kiyosaki, author of "Rich Dad Poor Dad," frequently shares his view that Bitcoin could reach $500,000 in interviews and on Twitter.
Institutional Projections
- Fred Thiel, Chairman and CEO of Marathon Digital Holdings, forecasts Bitcoin reaching $120,000 post-halving, attributing this potential rise to Bitcoin's finite supply, its role as a store of value, and the transformative impact of Bitcoin ETFs on market liquidity and stability.
- Pantera Capital's latest "Blockchain Letter" has projected that Bitcoin could reach nearly $148,000 by July 2025, based on historical trends in halving cycles.
- VanEck has a medium-term price target for BTC of $325k, half the market cap of gold, in line with the last bottom-to-top cycle of 16x in 2020-2021.
Analyst Outlooks
- Boy wonder crypto analyst Will Clemente predicts we’ll see $100k sometime in Q4 2024.
- Crypto trader Ansem believes that Bitcoin will hit $100,000 and then unlock the next real Altcoin Season.
A Halving Unlike Any Other?
When Bitcoin and crypto enter peak bull season territory, it’s very hard to separate hype from substance. However, with massive, trackable institutional adoption and a dramatic reduction in mining rewards, coupled with other bullish events such as the 2024 US Presidential Elections and the inevitable lowering of interest rates coming this year, there’s no denying that this time feels different.
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