Bitcoin is halfway to the next halving – what can history teach us?

Source: Adobe / kwanchaift

Bitcoin (BTC) is halfway to the next halving, and analysts are once again coming out with their predictions on how the price will respond this time around. But the market’s reaction to halving bitcoin has been difficult to predict in the past, and its results usually take time to materialize.

The next Bitcoin halving – the 50% halving in block rewards paid to miners on the network that takes place roughly every four years – is expected to occur around March 30, 2024. At that time, the reward will be halved, from BTC currently from 6.25 to BTC 3.125 per block mined.

Currently, approximately 900 bitcoins (US$27 million) are generated daily. After the next halving, this number will drop to 450 BTC.

Source: Currency Metrics

In the previous Bitcoin halving, which occurred on May 11, 2020, the Bitcoin block reward moved from BTC 12.5 to BTC 6.25. But in terms of price, the immediate reaction to the event was probably less important than some expected (and might have hoped). BTC ended the day slightly lower, but according to some observers, halving was among the catalysts for the massive rally that began just two months later.

The round, which lasted until April of the following year, took BTC to an all-time high of over $60,000 USD. At that point, a major correction halved the price of BTC in a period of about 100 days, paving the way for the second phase of a bull run that took BTC to an all-time high of around $69,000 in November 2021.

However, we still don’t know how the market will react to the next halving. What we do know, however, is that the rewards miners will receive will be halved, and so the price will have to go up in order for mining to remain profitable.

Given the widely held notion that the cost of producing new bitcoin acts roughly as a floor for the price — a theory even bitcoin creator Satoshi Nakamoto himself wrote about — it would make sense for the price to go up. Also, the question of whether Bitcoin usage will increase sufficiently and transaction fees will exceed block rewards – remains open.

Average 30 days. Source:
Average 30 days. Source:

Immediate price feedback is seldom shown

Looking at the previous halving, it is clear that there was rarely an immediate price reaction to the halving event itself. Given that this is a well-known event that has to be priced in by the market, it’s not surprising.

Source: TradingView

What can be noted, however, is that prices on all the past three occasions have risen significantly sometime after the halving occurred.

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Prior to the previous halving, expectations ranged from the halving having no effect on price at all, to heavy selling due to miners offloading coins and traders following the ‘buy rumor, sell news’ strategy, as well as seeing upward price pressure with entry Fewer new coins are in circulation.

Once the event occurred, the reality turned out to be the closest to the first prediction, with almost no effect on price initially.

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Going back to the second bitcoin halving in 2016, the price actually declined initially, surprising many holders of the coin who had been anticipating a price hike from the event. However, just as during the last halving, an upward trend in the price of Bitcoin later resumed, sending BTC into a massive bull market that lasted until the end of 2017.

Among those anticipating a price hike is independent crypto consultant Richelle Ross books In December of 2015 – when BTC was worth around $400 – she thought BTC would reach $650 after halving the following year.

The prediction turned out to be correct, albeit somewhat on the conservative side, as Bitcoin approached the $1,000 level before the end of the year.

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The first Bitcoin halving occurred in 2012. As explained in an article by Ethereum (ETH) founder Vitalik Buterin, who was then a writer for Bitcoin Magazine, the community was roughly divided into two camps at the time. In the first camp were those who argued that halving would trigger a “supply shock” that would push the price twice as high, and in the second camp were those who saw halving as a “known event” to the market that would not affect the price at all.

Looking at this day, we can conclude that what actually happened was largely a mixture of views espoused by both camps – and it seems to have been the case for both parties ever since.

Yes, the halving was – and always has been – a well-known event, so the immediate impact of the price was minimal. However, the reduced supply of new coins in the market, combined with the fact that miners, all being equal, would need a higher price to make a profit, has on all three occasions in the past led to higher prices on average in the long run.

So while we don’t know what will happen after the next halving sometime in the first half of 2024, it is reasonable to expect more of the same – and that the event could trigger another cycle of the bitcoin market.


Learn more:
Bitcoin miners experience record difficulty with reduced profitability
Another solo Bitcoin miner wins the block race

Explaining Bitcoin Market Cycles
This is how Bitcoin has changed since the second half of 2016

The Bitcoin Halving as a “Crypto Super Cycle Marketing Event” and His Three Novels
Six Bitcoin halving scenarios and the probability of each

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