The incentive for miners to solve each block is halved on a regular basis, a phenomenon known as the Bitcoin halving. This occurs roughly every four years, and in the past, it has significantly affected the price of Bitcoin.
History indicates that before each halving, the price of Bitcoin usually follows a similar path. There are five phases to this pattern:
Stage 1: Reduction
The first stage usually starts a few months before to the halving and is characterized by a drop in the price of Bitcoin. This is because, prior to the event, investors frequently sell their Bitcoins in order to benefit.
Phase 2: Sickness
The price of Bitcoin usually stalls during the second phase, which might extend for several months. This is because investors are holding out to see how the price halving will affect things.
Stage 3: Recuperation
A few months following the halving, the price of Bitcoin usually starts to rise again, marking the start of the third phase. This is because investors start to view the halving as a potential source of investment.
Phase 4: Expansion
The price of Bitcoin usually rises steadily during the fourth phase, which can extend for several years. This is because fewer Bitcoins are being produced as a result of the halving, increasing their scarcity and consequent value.
Phase 5: Maximum
The price of Bitcoin normally peaks in the fifth phase, which happens a few years following the halving. This is because investors start looking for alternate assets when the Bitcoin market reaches a saturation point.
What might we anticipate from the halving in 2024?
August 18, 2024, is when the 2024 Bitcoin halving is planned to occur. The historical pattern indicates that we should anticipate the following:
In the upcoming months, the price of Bitcoin will start to drop, with a bottom of between $20,000 and $30,000.
Bitcoin's price will remain flat for a few months before starting to rise in 2024's fourth quarter.
In 2025, the price of Bitcoin will start to increase steadily and peak between $100,000 and $200,000.
Naturally, it is hard to say for sure what will happen to the price of Bitcoin. The historical trend, however, indicates that the 2024 halving would be advantageous for the cryptocurrency's valuation.
What elements might influence the price of bitcoin?
Other factors, in addition to the halving, may have an impact on the price of Bitcoin in the upcoming months and years. These elements consist of:
Banking institutions' acceptance of Bitcoin. The adoption of Bitcoin by additional financial institutions may raise demand for the cryptocurrency and consequently drive up its price.
The control over Bitcoin. The price of the cryptocurrency could be significantly impacted by Bitcoin legislation. Positive regulations may raise interest in Bitcoin, while negative regulations may cause its value to drop.
Advancements in technology related to cryptocurrencies. The price of Bitcoin may be impacted by technological advancements in the cryptocurrency field, such as the introduction of new applications and technology.
It remains to be seen how these factors may influence the future price of Bitcoin. But the 2024 halving might be a significant occasion that propels Bitcoin's uptake and raises its price.