How Much Will Bitcoin’s Price Go Up After This Month’s Halving?by@MarkHelfman
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How Much Will Bitcoin’s Price Go Up After This Month’s Halving?

by Mark HelfmanApril 5th, 2024
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Bitcoin’s price is expected to halve at the end of the year. The halving will cut new issuance in half  equivalent to roughly $11 billion per year at today's prices. But the market found itself overextended in a way we’ve never seen heading into a halving event.
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The $1 trillion question: what will happen to Bitcoin’s price after halving?

If history is our guide, not much.

What did Bitcoin’s price do after the three previous halving events?

In 2012, bitcoin’s price languished for more than a month. In 2016, its price dropped and took four months to get back to even. In 2020, its price stayed flat for two months.

See for yourself:

Don’t be surprised if we get a similar outcome this time.

Typical operation

To summarize a far more nuanced, complicated story:

In 2024, we caught a massive bid. This round of speculative enthusiasm pushed Bitcoin’s price to a new all-time high. The market found itself overextended in a way we’ve never seen heading into a halving event.

Today, there’s no reason to think this market can’t go a little higher for a little longer, simply on the momentum it’s built up for months.

Stepping back from the day-to-day commotion, we’re still at extremes on many market metrics. I have shared the reasons in my Crypto is Easy newsletter.

It all makes sense and fits historical patterns. I guess we’ll see whether these bids keep pouring in at the pace we’ve seen in the past two months. Otherwise, we could have a bumpy road ahead.

But Mark, the ETFs!

Those Wall Street ETFs have taken in $12 billion in new inflows.

While that is a substantial accomplishment and certainly helpful, it can’t count for the $650 billion rise in Bitcoin’s market cap — even if you give the ETFs a generous multiplier effect.

Anyway, how sure are you that Aunt Sally, Uncle Morton, and the pickleball crew haven’t already gotten their 1–3% allocation? If that’s the case, they have no reason to put more money into the ETFs.

One less point: ETFs let people buy and sell. So far, we’ve seen a lot of buying and not a lot of selling.

What happens when that changes?

In recent weeks, net inflows have crashed. Some days, they’re negative. See for yourself, from Farside Investors UK:

Is the trend starting to shift, or is it no big deal?

We’ll see.

Mark, do you mean Bitcoin’s price will never go up?

On the contrary, its price will do just fine.

The halving will cut new issuance in half — equivalent to roughly $11 billion per year at today’s prices.

That’s almost $1 billion less selling pressure on the market each month (more as the price goes up) and as much as the Wall Street ETFs brought in this year.

While $1 billion each month is not a lot for an asset as large as Bitcoin, it’s enough to make a difference. And, unlike those ETFs, those Bitcoins are off the market forever. Supply from those ETFs can hit the market at any time.

We also have a strong base of advocates (that now includes major Wall Street firms), people who consistently, habitually buy Bitcoin all the time, and speculators who see financial opportunity in it.

The halving helps push that process along.

Sometimes, it takes longer than you expect to see the result. I would expect the same will “HODL” true this time.

$150,000 is still possible by the end of 2025. If it happens, the halving will play a key role.

In the near term, expect something far less spectacular.

Mark Helfman publishes the Crypto is Easy newsletter. He is also the author of three books and a top Bitcoin writer on Medium and Hacker Noon. Learn more about him in his bio and connect with him on Superpeer or Tealfeed.