The Bitcoin (BTC) halving on April 20, 2024 is hotly anticipated because Bitcoin’s value increased after each previous halving. But will previous trends repeat in 2024?
In this explainer, we outline trends and past price movements for the Bitcoin Halving, and expected impacts on Bitcoin ETFs, plus we share expert predictions for Bitcoin future price movements post-halving.
Table of contents
- Latest Bitcoin Halving News and Rumours
- Could The 2024 Bitcoin Halving Be Anticlimactic?
- Bitcoin Halving Trends
- Post-halving Bitcoin Movement
- BTC Price Prediction
- Why is this Bitcoin Halving so Anticipated?
- How might the 2024 Bitcoin halving affect ETFs?
- 2024 Bitcoin Halving Price Predictions
- Post-Halving Price Predictions
- 2024 Bitcoin Halving = Possibly Anticlimactic?
Latest Bitcoin Halving News and Rumours
Excitement over the upcoming Bitcoin Halving has resulted in Google Searches for the term “Bitcoin Halving” soaring to its highest point. Per Google Trends data, March 2024 searches for the term “Bitcoin Halving” reached an interest score of 45. This far exceeds interest scores of 2—3 in January and February 2024.
Google Trends data also shows that the term is attracting most interest from Nigeria, the Netherlands, and Switzerland.
According to the AFR, ‘winners’ of the upcoming halving in Australia might be institutional investors of Bitcoin. On the other hand, smaller Bitcoin mining firms might “find it more difficult to remain profitable,” Ben Celermajer, co-founder of Australian crypto hedge fund Magnet Capital, told AFR.
Could The 2024 Bitcoin Halving Be Anticlimactic?
Roughly every four years Bitcoin is halved. Bitcoin was launched in 2009 and previous halvings have occurred in 2012, 2016 and 2020.
The purpose of Bitcoin halving is to control Bitcoin’s inflation rate by slowing down the number of coins created. This protocol is designed to help retain Bitcoin’s scarcity and value.
Halvings reduce the miners’ reward by half, which in turn reduces the frequency of new Bitcoin added to the system.
The Chainsaw spoke to Dr. John Hawkins, Senior Lecturer at the Canberra School of Politics, Economics & Society at the University of Canberra. He says that while “the halving is often described as reducing the supply of Bitcoin … it actually just means the increase in supply will be less”.
This is important because only 21 million Bitcoins will ever be created. Bitcoin miners, exchanges and investors estimate there are between 1.3 million and 1.4 million Bitcoin left, which will be gradually released over the next 100 years.
Decreasing the block reward to 3.125 BTC in the 2024 Bitcoin halving will influence supply and demand dynamics, but how? A look at past halving trends and previous price movements may provide some insight.
Bitcoin Halving Trends
Historically, Bitcoin’s price has shown both pre-halving rallies and post-halving corrections. The Bitcoin price rallied before each previous halving in 2012, 2016 and 2020.
Bitcoin price rises throughout early 2024 could be attributed to a range of factors including speculation on the potential supply shock instigated by the halving and increased market anticipation of this event.
Post-halving Bitcoin Movement
Previous halvings all preceded positive impacts on Bitcoin’s value. However, the price rises were not immediate and they varied each time.
Research by crypto tax consultancy CoinLedger, shows the price rises following the previous three BTC halvings.
| Results | 2012 Bitcoin Halving | 2016 Bitcoin Halving | 2020 Bitcoin Halving |
| Bitcoin reward per block (previous): | 50 BTC | 25 BTC | 12.5 BTC |
| Bitcoin reward per block (new): | 25 BTC | 12.5 BTC | 6.25 BTC |
| Price on halving day: | USD$12.35 | USD$650.53 | USD$8,821.42 |
| Price 150 days later: | USD$127.00 | USD$758.81 | USD$10,943.00 |
While crypto experts heavily analyse the historical movements of the three previous halvings, several factors relevant to the first halving in 2012 have changed dramatically since then.
These include the relatively low number of cryptocurrency users in 2012, fewer Bitcoins in circulation, low Bitcoin adoption rates and reduced Bitcoin awareness compared to today.
Statista predicts that the number of users in the cryptocurrencies market is expected to reach around 990 million by 2028.
Only 1.3% of these were estimated to exist in 2012.
With so much speculation, are the previous post-halving Bitcoin performances evidence enough to predict a similar pricing outcome to this 2024 halving, given the unique market dynamics in recent years?
“I think so,” said Dr. Jason Potts, Distinguished Professor of Economics at RMIT University and Co-director of the Blockchain Innovation Hub at RMIT. “We generally expect the effect will be price growth, but because this is well known in advance, I’m not expecting any large jumps.
“The halving is in many ways just a ‘focal point’ or ‘Schelling point’ (after the Nobel Prize winning economist Thomas Schelling, who developed the theory of this type of coordination) for attention to Bitcoin dynamics and pricing.”
Ray Osthmuller, Head of Marketing at CoinSpot, the largest exchange in Australia, said: “Although past performance should never drive decisions, many investors are excited about the halving after looking back at the previous events. With the Bitcoin price increasing six months post halving the last three times, investors are excited in the hopes that pattern continues.”
Dr. Hawkins remains to be convinced. “The first halving in 2012 was before most people had heard of Bitcoin, it was priced at $13, there was no correlation at all between the Bitcoin price and other financial variables, and [it was] before there were platforms like Binance. So, I’m not sure how useful it is as a guide.
“But even if we think all halvings are relevant, there are still only three. So, if there was just a random response, there is a 1/8 chance the price would rise after it all three times. And although there were some big price rises some months after the 2016 and 2020 halvings, there were subsequently big price falls. Furthermore, it has been known for years that a halving would occur around April 2024 so it should be fully priced in.”
BTC Price Prediction
While the value of Bitcoin surged in 2021 after the most recent halving, it plummeted in 2022, reflecting its volatility. CoinMarketCap says Bitcoin’s “price history shows a pattern of sharp rises followed by corrections, reflecting the volatile nature of the cryptocurrency market”.
Investors need to be aware that the cryptocurrency market is complex and influenced by various factors. Past performances should not be the only indicator used when making investment decisions. Thorough research and due diligence are always recommended before any cryptocurrency investing.
In addition to past price movements, unprecedented market factors are also making this halving highly anticipated.
Why is this Bitcoin Halving so Anticipated?
There are several factors.
- Bitcoin’s Current Trading Value Pre-Halving
This is the first halving where Bitcoin is trading at an all-time high, topping over USD$71,000 (AUD$110,700) earlier this month.
“The impact of the Bitcoin halving on its price is impossible to predict,” says CoinSpot’s Osthmuller. “If we look back to the most recent halving in 2020, the price of Bitcoin did increase from AUD$13,535 to AUD$21,870. Whilst some people will reflect on the past to predict what could happen, it’s important to note that the economy, market confidence and several other factors all impact what can happen to the price as we look ahead.”
Previous halvings occurred when Bitcoin’s price was far below its previous peak, so this halving event may explore uncharted pricing territory.
Pav Hundal, Lead Market Analyst at crypto exchange Swyftx, told The Chainsaw: “This is shaping up to be the important halving in the brief history of Bitcoin. So much is different from the last halving in 2020. Around 94% of all Bitcoin is already in circulation and its rate of production is dropping from a low base, to a very low base. So, I don’t think it’s obvious that there’s going to be a huge supply shock.”
According to CoinSpot’s Osthmuller: “You can never predict future events from past performance. However, important news this year, such as the Bitcoin ETF’s approval in the USA, as well as reaching a new all-time high, has definitely increased confidence for investors.”
RMIT’s Dr. Potts said: “In a way, this is perhaps the least exciting Bitcoin halving because we have seen three of these before and so there is much less surprise and anticipation of effect. I think this is mostly priced in.
“But one new factor is that there are a lot of people new to crypto and Bitcoin, due to things like the ETF, so it’s good to remind them about this hard-coded feature of ever reducing supply growth.”
Which brings us to Exchange Traded Funds (ETFs) and their fresh impact on this Bitcoin halving.
- Institutional Investor Interest
Bitcoin’s record trading highs can be partially attributed to US regulators recently approving Exchange Traded Funds (ETFs) for the cryptocurrency.
In January 2024, the US Securities and Exchange Commission (SEC) approved 11 spot Bitcoin ETFs from financial institutions including BlackRock, 21Shares and Invesco.
A spot Bitcoin ETF tracks the price of Bitcoin, allowing you to invest in it without actually owning any coins, by trading in shares.
These differ from futures-based Bitcoin ETFs, which were already operational. Futures-based Bitcoin ETFs track the price of Bitcoin through contracts that expire at a certain date, rather than holding actual Bitcoins.
According to Mads Eberhardt from Steno Research, ”the surge in interest towards ETFs has also heightened awareness around the halving event more than ever before. Back in 2020, halving discussions were relatively underground, but now, the topic seems to be on the tip of everyone’s tongue.”
Market circumstances preceding this event will also influence the halving.
- Market Dynamics
Since the 2020 Bitcoin halving the world has experienced unprecedented turbulence via a global pandemic, war in Europe and the Middle East, and record inflation. Cryptocurrency prices plummeted in 2022, causing a brutal bear market. A drop in total crypto wallet downloads resulted.
The market also suffered when FTX, one of the largest crypto exchanges based on market share, collapsed in November 2022.
These factors, combined with the recent rise of Bitcoin pricing to an all-time high, have brought an unparalleled level of attention to this halving event and how it will impact not just Bitcoin, but Bitcoin ETFs.
How might the 2024 Bitcoin halving affect ETFs?
“Bitcoin halving events can impact bitcoin ETFs and the broader cryptocurrency market, although outcomes can vary,” says Kent Thune, Research Lead for etf.com.
“For example, buying into the scarcity narrative, some investors may view Bitcoin as a more attractive store of value, potentially influencing demand for Bitcoin ETFs. Whereas heightened awareness can lead to price gains well in advance, leaving little room for more gains once the event occurs.”
Despite the anticipation recent Bitcoin ETFs approvals have brought to the cryptocurrency market, similar risks for investing apply.
2024 Bitcoin Halving Price Predictions
What does all this mean for the price of Bitcoin post-halving? We asked these experts what impact they believe the 2024 event will have.
“The impact of the Bitcoin halving on its price is impossible to predict,” says CoinSpot’s Osthmuller. “If we look back to the most recent halving in 2020, the price of Bitcoin did increase from US$13,535 (AU$21,100) to US$21,870 (AU$34,100). Whilst some people will reflect on the past to predict what could happen, it’s important to note that the economy, market confidence and several other factors all impact what can happen to the price as we look ahead.”
“Halvings can be volatile,” said Dr. Potts, “because of the attention that comes with it. The broad direction is upwards due to a reduced rate of emissions. But the halving point is also a focal point for selling as well as buying, so on the day it can go either way.”
Post-Halving Price Predictions
“We have a wall of new cash entering the market from exchange traded funds and a lot of it is heading straight into 401 (K) plans, the U.S. equivalent of super funds,” said Hundal from Swyftx. “I just think it is far too early to know what is going to happen.”
Dr. Hawkins said, “there could well be a case of the common market phenomenon of ‘buy the rumour, sell the news’ after the halving. Naive gamblers who bought into the hype that the halving would lead to a big jump in price may be very disappointed and then sell, which would depress the price further.”
“Buy the rumour, sell the news” is a trading strategy based on the concept of people acting on market expectations and speculation rather than waiting for actual events or announcements.
If good news is expected sometime in the future, the price will often move higher in anticipation of that date, but not necessarily after.
2024 Bitcoin Halving = Possibly Anticlimactic?
With more users than ever in the cryptocurrency market and wider acceptance of Bitcoin being achieved through U.S. approvals of ETFs, chatter in the crypto space about the 2024 Bitcoin halving is at an all-time high.
But will the event end up being anticlimactic? Time will tell. The one guarantee is that the impacts from the 2024 Bitcoin halving will form part of the historical analysis in readiness for the next Bitcoin halving in about four years.
This article is for general information purposes only and is not intended to be financial product advice. You should always obtain your own independent advice before making any financial decisions.
