The Bitcoin Halving, a major event for BTC that takes place every four years, is expected to take place in the second half of April. Market participants are already preparing for it and are not just counting down the days.
A key reason for the popularity of Bitcoin (BTC) lies in its computer code: It irrevocably stipulates that the maximum number of all Bitcoin is 21 million. This means that Bitcoin is by definition a rare commodity (“digital gold”), with around 19.6 million BTC already in circulation. New BTC are created exclusively through Bitcoin mining and a special mechanism is used to combat inflation. Every four years, a Bitcoin Halving is automatically activated, which halves the number of new BTC distributed to miners.
Historically speaking, the fourth Bitcoin halving is now less than a hundred days away. The countdown to the Bitcoin Halving is calculated in real time by data services such as CoinGecko. The Bitcoin Halving is currently forecast to take place on April 22. However, the exact date may still change slightly, as the Bitcoin Halving will be activated with block 840,000 and the speed at which new BTC blocks are reached will adapt to network capacities. In any case, after the fourth Bitcoin Halving, only 3.125 BTC per new block will be distributed to the miners instead of the previous 6.5. This will also reduce the number of new Bitcoin created daily from around 900 to around 450 BTC.
This deliberate shortage of new BTC has the potential to drive the price curve upwards – this is the theory often associated with the Bitcoin Halving. In fact, the BTC price curve showed an upward trend with a time lag after the previous three Bitcoin Halvings, which ended in new all-time highs. When the last Bitcoin halving to date took place in May 2020, for example, it took a good six months for the price of BTC to rise significantly and then only end in November 2021 at the all-time high of just under USD 69,000, which is still valid today.
However, the signs may be different for the upcoming Bitcoin halving. Analysts such as those at VanEck believe that the Bitcoin halving will be associated with “minimal drama” because the markets have long since become accustomed to the mechanism. However, the BTC Halving will have a direct impact on the Bitcoin mining industry, where takeovers are already on the horizon.
Conclusion: Bitcoin Halving a piece of the puzzle for price forecasts
The newly approved Bitcoin ETFs are currently dominating the discussion, but experts already have the halving in mind at the same time. This is because the countdown to the Bitcoin Halving will help to keep public interest in BTC high. From a US perspective, presidential elections are due in November 2024, which could lead to a reassessment of the crypto industry by the authorities. Optimists such as those at VanEck and Standard Chartered Bank see this mixed situation as the basis for their price target of USD 100,000 for Bitcoin by the end of 2024, while sceptics argue that the Bitcoin halving in 2024 is overvalued and has long since been priced in. We will know more in just over three months.