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Was the Halving Priced In? What to Make of Bitcoin Performance

By Evan Jones05/15/2024

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Bitcoin’s fourth halving happened in mid-April, and yet BTC is still sitting at a price that is below where many likely hoped it would be a month after the halving occurred. The king of crypto continues to dance with the $60,000 USD level, though has yet to dip below the level and stay there for very long. Despite this, it is likely that many are wondering if the halving event was already priced in. 

We’re going to take a dive into Bitcoin’s price action heading into the halving and how it’s doing now, let’s jump in.

Sell the News?

The old adage of selling the news for an investment asset seems to have been prudent advice for Bitcoin holders, but that also depends on the holders’ views of where Bitcoin’s price will end up in the long term. There are many short-term buyers who likely bought when Bitcoin was still around $40k and decided to cash out at $60k, or even more likely $70k. 

This includes those that bought ETF shares, which means the providers then had to sell BTC, affecting its price.

They may have since reinvested into Bitcoin, but it’s also possible that they just wanted to make a quick profit. Seeing as Bitcoin’s price hasn’t continued an upward trajectory, if an investor cashed out when Bitcoin hit its all time high, and bought back in more recently, they’re probably set up well for if and when Bitcoin takes off again. 

Unusual Price Action Heading Into Halving

This Bitcoin halving was unlike any of the previous halvings in the blockchain network’s history for two reasons. The first reason is that spot Bitcoin ETFs were approved in January, giving traditional investors a way to get exposure to Bitcoin without actually having to buy the asset directly, set up a wallet, sign up for a crypto exchange, and so on. This convenience allowed those who had never bought Bitcoin before a way to do so, and they did, in record numbers.

Which leads us to the second reason this halving was unlike any of the previous ones; Bitcoin hit an all time high before the halving even happened. Bitcoin blew through its previous all time high of just under $69k, reaching close to $74,000 a month before the halving happened. Generally, Bitcoin’s price struggles as it goes into a halving event.

BTC Price Comparison One Year After Previous Halvings

In order to show how this halving event has been different, we’re going to take a look at the previous Bitcoin halvings. How much it was trading for going into the halving, and how much it was trading for a year later. 

Bitcoin’s first halving occurred on November 18, 2012, and the block reward went from 50 BTC down to 25 per block. Leading up to this halving, Bitcoin was trading at about $12 per BTC. One year later on November 18, 2013, Bitcoin was trading at over $500 USD per BTC, and got to as high as $1,000 in December 2013.

Bitcoin’s next halving happened on July 9, 2016. This halving caused the block reward to be reduced to 12.5 Bitcoin. Leading into the second halving event, BTC was trading at around $650 USD. By July 11, 2017, Bitcoin was trading at over $2,300 USD. It then closed the year at over $15,000 USD per Bitcoin.

The most recent halving before the one that happened in April 2024, was on May 11, 2020. The block reward went down to 6.25 Bitcoin per block. Leading into this halving, Bitcoin was trading around $9,000 USD per BTC. A year later, on May 20, 2021, Bitcoin was trading around $50,000 USD per BTC, having hit what was an all-time high of over $63k USD a month earlier. 

Though some Bitcoin investors were likely hoping Bitcoin’s price would be higher a month after the halving, that isn’t typical. Neither was it hitting an all time high before the halving even happened. Those that bought before the last halving in 2020, have seen gains of over 600%. If Bitcoin gains 600% by a year after this halving, it will put BTC at well over $400,000 per coin a year from now.

What to Make of BTC’s Price a Month After the Halving

There is nothing to be concerned with when it comes to Bitcoin’s price just a month after the fourth halving in its history occurred. For the first time in Bitcoin’s history, there were legitimate external factors that pushed it into mainstream investment portfolios, and allowed those who had never invested in it before a way to do so. 

Though the price seems to be struggling after the halving, this is a fairly normal scenario. If we’re looking at Bitcoin’s price a year from now, it may be exponentially higher, as it has done so in the past. It may be prudent to hold onto your BTC in the likelihood that its price will once again pass its previous all time high by this time next year if not sooner. 

Article tags

bitcoin
cryptocurrency
investing
Evan Jones

Author

Evan entered the crypto scene in 2017, attracted to the many disruptive possibilities that blockchain could have on current world systems. He has a keen interest in decentralized services, payment processing, and viable NFT use cases such as event ticketing. He spends his days writing with his dog Kobe under his feet, if not on his lap.

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