Bitcoin Halving Market Impact
The countdown is underway for the Bitcoin Halving, scheduled for April 2024! Investors are excited about the halving, recognizing its historical link to substantial price gains for bitcoin afterward. Since the inception of Bitcoin, there have been three halvings and each entered a bull run after the halving occurred.
What is the Bitcoin Halving?
Every four years, the Bitcoin network undergoes a programmed event called a "halving". Currently, the Bitcoin network generates about 900 new bitcoin each day. However, after the halving event, this will drop to 450 bitcoin per day.
Only 21 million bitcoin will ever exist, which slows down the creation of new bitcoin. Think of it like gold, which is valued for its limited supply and scarcity.
History of Halvings: Supply and Demand
The relationship between Bitcoin halving events and its price can be understood through the basics of supply and demand. If the supply of new bitcoin entering circulation decreases, and demand increases, the reduced supply can lead to a substantial price increase although there may be other factors that play a role.
Historically, after the halving takes place, you’ll see Bitcoin’s price set new records approximately one year after it occurs.
Now, let's look at the price of Bitcoin during and after the past three Bitcoin halving events.
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The First Halving - November 2012
- Price of Bitcoin During the Halving: ∼$12
- Price of Bitcoin After the Halving: ∼$1,100
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The Second Halving - July 2016
- Price of Bitcoin During the Halving: ∼$650
- Price of Bitcoin After the Halving: ∼$18,000
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The Third Halving - May 2020
- Price of Bitcoin During the Halving: ∼$8,500
- Price of Bitcoin After the Halving: ∼$69,000
Bitcoin ETF and the Halving
The 2024 Bitcoin Halving is attracting a lot of attention, especially with recent financial trends.
The approval of the Spot Bitcoin ETF by the SEC has led to record-breaking inflow of money amongst institutions, bringing in a large wave of capital to Bitcoin. This brings us back to the fundamental concept of supply and demand. Just like in traditional economics, these principles are just as relevant in the world of Bitcoin. As demand for bitcoin increases, supply decreases thus potentially increasing its price. Considering financial trends, analysts are forecasting that Bitcoin could reach new all-time highs.
You’re Ready For the Next Bitcoin Halving!
As the 2024 Bitcoin Halving approaches, many investors are eagerly waiting and preparing for this significant event. iTrustCapital has experienced a notable uptick in new accounts and clients buying Bitcoin with tax advantages inside an IRA. Sign up today, and gain access to iTrustCapital’s easy-to-use platform, available 24/7, preparing you to buy and sell Bitcoin with confidence.
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