- When considering past references, the price rally of Bitcoin (BTC) is dependent on many factors since the digital asset is still in its infancy.
- The Bitcoin halving event gained popularity and attention because it marked a turning point in the price of BTC trading.
- The first Bitcoin halving occurred in 2012, reducing the reward to 25 BTC. The next halving in 2016 reduced it to 12.5 BTC, and after the 2020 halving, the current mining reward stands at 6.25 BTC.
What is the halving event in Bitcoin, when will it happen, and will the price rise? Your questions are answered in our current article!
The Importance of the Bitcoin Halving Event
When considering past references, the price rally of Bitcoin (BTC) is dependent on many factors since the digital asset is still in its infancy. Even a small development or fluctuation at the macroeconomic levels worldwide can affect the sensitive trading price of BTC. However, the halving of Bitcoin is one of the most significant events that shape the course of the cryptocurrency. The next halving is just around the corner, and investors are expecting a BTC price rally, but will it really happen?
The Bitcoin halving event gained popularity and attention because it marked a turning point in the price of BTC trading. After the event, the price of the leading cryptocurrency broke previous records and reached unprecedented heights. The current all-time high for the price of Bitcoin was achieved in November 2021, nearly a year after the last halving.
Since the inception of the first cryptocurrency, there have been four halving events. The next one is expected to take place around the second quarter of 2024. The Bitcoin halving event halves the mining rewards for BTC. Initially, when cryptocurrency was created by Satoshi Nakamoto in 2009, mining rewards were approximately 50 BTC.
With each Bitcoin halving event, the price of crypto assets experiences a significant surge in the following months. Price rallies have occurred after past events. Because the mining reward is halved roughly every four years, this type of event is expected to continue, slowing down the pace at which new BTC enters the current supply and thereby increasing demand and, consequently, the price.
The Bitcoin Halving is Expected to Take the Price Above $100,000
Bitcoin bulls view the event as one that will carry BTC prices to unprecedented levels, as mentioned above. The next goal for these bull investors is at least above $100,000, with some believing it could go much higher. However, Bitcoin’s price typically remains neutral when the halving event occurs. It often gains momentum slowly and reaches its peak in the coming months.
For example, FlibFlib, the founder of the crypto analytical platform Decentrader, stated that the expected target for Bitcoin is $180,000. The analyst obtained this number by studying past Bitcoin halving events and price movements. According to FlibFlib, this time, the next rally might take up to 18 months to reach another all-time high.
However, there are other metrics in play this time because many things have changed in recent years. General interest has shifted toward more decentralized finance with DeFi tokens, which have gained a significant market share in the crypto market. The last peak at $69,000 occurred during the COVID-19 recovery period when U.S. markets had ample liquidity due to low Federal Reserve interest rates. The Federal Reserve has been aggressively raising interest rates since 2022 to tighten the economy, a process that continues until July 2024.
Currently, the interest rate stands at 5.25%-5.50%, and the Fed has not given any indication whether it has finished raising interest rates or will continue reducing them soon.
