Bitcoin’s halving events, which occur every four years, have long been associated with bull runs in the crypto market and the subsequent rise in Bitcoin’s price to new all-time highs. However, is it the right time to invest in the world’s largest cryptocurrency during these halvings?
According to Vetle Lunde, a senior analyst at K33 Research, historical Bitcoin price data suggests that halving events can be a great opportunity for investors with longer time horizons. Lunde stated that Bitcoin reached a milestone on February 28, surpassing the $60,000 mark for the first time in over two years, just 47 days before the halving. Additionally, Bitcoin’s price has increased by 30% over the past week.
During a halving, the rate at which new BTC is issued into circulation is cut in half. Eventually, the network will stop producing new Bitcoin once 21 million coins are created, which is expected to happen by the year 2140, coinciding with the last halving event.
According to Bryan Legend, CEO of Hectic Labs and an investor, the period leading up to a halving can be a profitable time to hold Bitcoin. He mentioned that the rally to the $67,611 mark before the recent halving was largely driven by record inflows into 10 new spot Bitcoin exchange-traded funds (ETFs) in the United States. Bitcoin accounted for 94% of the total inflows, amounting to $1.72 billion, with U.S.-based funds dominating with net inflows of $1.88 billion.
Sergei Gorev, a risk manager at fintech platform YouHodler, noted that Bitcoin ETF inflows have played a significant role in the current rally, along with the anticipation of the halving.
While Bitcoin’s price typically experiences a rally leading up to the halving, it often goes through a period of consolidation immediately after. However, Lunde expects only a brief correction before Bitcoin continues its price rally to new all-time highs.
Bryan Legend from Hectic Labs predicts that by the end of 2024, Bitcoin’s price could range from $80,000 to $85,000 in the worst-case scenario, and $120,000 to $130,000 in the bullish case. He emphasized that these projections will largely depend on macroeconomic conditions.
It’s important to note that this article does not provide investment advice or recommendations. Investing and trading in cryptocurrencies involve risks, and readers should conduct their own research before making any decisions.