As we step into 2024, the crypto world is buzzing with anticipation as the countdown begins for Bitcoin (BTC)’s upcoming halving event, which is just 100 days away. After a declining 2022, 2023 marked a revival for the leading cryptocurrency. Bitcoin saw a 154% increase in value, but was overshadowed by the outperformance of various high beta tokens. The upcoming launch of Bitcoin’s spot ETF is dominating the headlines. However, an impending value driver is at the forefront even before the ETF’s debut. That is the much-discussed April halving.
Bitcoin halving is approaching
The halving, scheduled every four years, plays a crucial role in maintaining Bitcoin’s scarcity, limiting its maximum supply to 21 million local units. As of January 2023, the current supply of Bitcoin was 19.59 million units. The essence of halving lies in the literal halving of the block reward distributed to miners. In 2020, the reward decreased from 12.5 Bitcoin units to 6.25 Bitcoin units. The upcoming 2024 halvng will further reduce this reward to 3,125 units.
Historically, the price increase between halving events underscores their impact on Bitcoin’s value. After the 2016 halving, Bitcoin’s spot price increased by a staggering 1263% ahead of the 2020 halving. An interesting metric to observe is the increase in Bitcoin’s spot price between the halving event and the subsequent all-time high (ATH). Following the 2020 halving, Bitcoin experienced a significant increase of 654%.
What do historical data indicate?
Going back even further, historical data reveals the significant impact of halving events on Bitcoin’s value trajectory. Between the 2012 and 2016 halvings, the price increased by a whopping 5187%. Similarly, following the 2016 halving, Bitcoin’s spot price increased by an impressive 2922%. Most importantly, these halving events often act as catalysts for price increases, triggering bullish momentum before and after the event, attracting the attention of institutional players.
Check out MicroStrategy (MSTR), a major player in the crypto investment arena. Bitcoin purchases have increased to 56,650 Bitcoins in the ongoing year, a significant jump from a modest 8,109 units in 2022. MSTR, in particular, strategically increased its purchases leading up to the April halving, indicating institutional interest and confidence in Bitcoin’s orbit. As the countdown to April’s halving progresses, the crypto community is buzzing with expectations, drawing insights from historical patterns and institutional movements, and eager to witness how this momentous event will shape Bitcoin’s journey in the coming year.
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