Investors are closely watching Bitcoin’s upcoming halving, which is expected to take place in April, as history has shown that the cryptocurrency usually sees significant price appreciation in the wake of halvings.
The largest cryptocurrency BTCUSD,
it has gained more than 20% so far this year to around $52,000, building on a 150% gain in 2023, according to CoinDesk data. It is still about 25% behind its all-time high of $68,990, reached in 2021.
However, some analysts expect Bitcoin’s upcoming halving to push the cryptocurrency to a new all-time high.
Halving is a mechanism written into the blockchain algorithm to control the supply of bitcoin, which is capped at 21 million. During the halving, the reward for mining bitcoin is halved, meaning miners will receive 50% less bitcoin for verifying transactions.
Halvings are expected to occur after every 210,000 blocks mined, or approximately every four years, until the maximum supply of 21 million bitcoins is released.
The next halving is estimated to occur on April 19, although the exact time is subject to change, according to bitcoin investment platform Swan Bitcoin. The Bitcoin block reward is expected to be reduced from 6.25 to 3.125 Bitcoin in the next halving.
Bitcoin has gone through three halvings in its history and has recovered in the months following each halving.
The first halving occurred on November 28, 2012, when bitcoin was trading at around $12. It rose to $964 a year later, according to data from Swan Bitcoin.
According to CoinDesk and Dow Jones Market Data, Bitcoin was trading at around $640 when the second halving occurred on July 9, 2016. It rose 40% in the six months following the event and posted a 296% gain a year After. Bitcoin reached a cyclical high of $19,752 on December 17, 2017.
When bitcoin had its third halving on May 11, 2020, the cryptocurrency was trading at around $8,750. It gained 79.7% in the six months following the halving and was up 547.7% a year after the event. On November 10, 2021, Bitcoin reached its all-time high at $68,990.90.