Bitcoin’s fourth halving is near and with its arrival now just around the corner we are hearing an increasing amount of positive price forecasting within the crypto community, with targets ranging above $100,000.
In past years, following each halving of the cryptocurrency we have witnessed in parallel a strong price rally that has led Bitcoin to score several multiples on time.
Analysts and cryptocurrency enthusiasts agree that things will go in this direction this time as well, however, there are external factors to be considered in order to make a proper prediction.
Halving is in fact just one of the catalyzing events that could have a direct impact on the price of Bitcoin in the coming year.
Let’s look at all the details below.
Summary
Only 150 days until Bitcoin halving: what are the price predictions?
We are approaching one of the most anticipated four-year events for Bitcoin supporters and enthusiasts: in fact, as the famous “Bitcoin Magazine” reminds us, there are only 150 days left until the fourth halving of the first cryptocurrency by market capitalization.
A positive sentiment is beginning to emerge, as is the norm, among the crypto community that often results in super optimistic and sometimes even unrealistic price forecasts.
We have not yet reached a real FOMO phase, but there is certainly more attention from the retail public than there was at the beginning of the year.
It is tentatively scheduled for completion on 19 April 2024, more precisely at the height of block 840,000, and will cause yet another halving of rewards for network miners.
This time, 3.125 BTC will be generated with each block mined, thus reducing daily issuances of the cryptocurrency by about 450 units per day, which corresponds to about $16.8 million each day according to today’s values.
This reduction in the flow of new currency in the past has led the price of Bitcoin to see sharp increases, bringing incredible waves of new buyers to the market with each halving.
There is no shortage of superbullish predictions this go-round, but we should point out that every 4 years, as the halving passes and Bitcoin’s notoriety and capitalization grows, Bitcoin marks less and less marked increases in its price.
In fact, if we take a dive into the past, we realize how following the halving of 2021 the value of BTC increased about 94 times.
In 2016 we witnessed a rally that caused the value of the crypto to skyrocket by about 30 times while in 2020 we dropped to “only” 6 times.
It tends to be the case that the more years go by, the more the volatility of the crypto asset should reduce, with price growths becoming less and less pronounced.
In any case, it is good to remember that this trend could quietly be broken in 2024 and we could observe more pronounced growth than the last bull run.
There are those for example, such as user “Bitcoin Archive” who speculate a price of $220,000 in anticipation of the next halving.
At this precise moment we are not yet, according to at least the timing of the past years, in the real bull market of Bitcoin.
Usually in fact this is unleashed FOLLOWING the halving while in the months preceding the halving the price action starts to get slightly hotter but without exaggerated movements.
According to the theories of the well-known PlanB we are still in the “pre bull market” phase and will move to the most intense part just after Bitcoin’s halving is completed, unless the spot etf is approved in the US before May 2024.
All external factors to be considered in parallel with halving
Making comparisons with the price performance of past years can be useful to get an idea of how Bitcoin will perform following the next halving, but to make a realistic forecast, other factors that could influence its trajectory and especially the timing of movements need to be kept in mind.
In fact, many people forget that halving has a positive effect only on the supply in the BTC market, which is precisely reduced due to the halving of the miners’ block reward.
On the other hand, with regard to the demand present on crypto trading venues, here are other events that could have an incredibly strong impact.
First, the issue of the spot ETF for BItcoin plays a central role in this context: the legitimization of cryptocurrency in the U.S. as a regulated asset and approved by the same Market Surveillance Commission could trigger a flow of confidence among institutional players, which in turn would create the conditions for a substantial increase in demand.
Most asset fund managers agree that the spot etf, regardless of whether it is proposed by BlackRock, Vanguard, Fidelity or Ark, will bring an extraordinary flow of demand that alone will be enough to break previous all-time highs for Bitcoin.
The first SEC approvals could come as early as January 2024, while other deadlines are expected in March.
An eventual approval in January could lead to an anticipation of Bitcoin’s bull market, which would start before the cryptocurrency’s halving this round and not after.
Another data point to consider in order to make a sensible and accurate prediction of Bitcoin’s price and timing concerns the U.S. central bank’s interest rate affair.
According to data from the CME‘s “Fedwatch tool,” the FED could begin the phase of monetary expansion, which would result in a cut in interest rates and consequently on increased stimulus for speculative markets, as early as May 2024 right around the time of Bitcoin’s halving.
The tightening easing put in place by the FED through 2022 has led to the most volatile markets experiencing heavy losses, with rates rising above 5% from a situation charactherized by 10-year rates of 0.
Now the course appears to be about to reverse, and with it will likely begin a season of strong upside for equity and crypto markets.
If the Fed’s first rate cut to 500 basis points happens before May, then again Bitcoin’s bull run could be ahead of what is its canonical timing.
All these 3 events put together, if they converge successfully, could trigger one of the largest crypto market growths observed to date.
The outlook and assumptions are different than in past years and in this halving round things could get more bullish than ever for Bitcoin.
The outlook for digital gold can only be super positive: if all goes right it could easily see a price above $150,000 in the next 1-2 years.
