Bitcoin
Prediction: Bitcoin Halving Could Be a Millionaire Maker
Investors are counting on the halving to make Bitcoin soar in value. But that hasn’t happened yet.
It’s fair to say that, until recently, the long-awaited Bitcoin (Bitcoin 1.60%) the halving was largely discouraging. At the time of the halving on April 19 – when Bitcoin mining rewards were cut in half – Bitcoin was trading close to $64,000. For much of the following month, Bitcoin traded lower or sideways, even falling below the $57,000 level.
But it’s too early to give up halving potential to increase the price of Bitcoin. After all, most halving cycles last 12 to 18 months, and there’s still plenty of time for the effects of halving to appear. So what can we expect from this halving in the coming months and how high can Bitcoin go? ?
Data from previous Bitcoin halvings
The biggest reason for optimism is Bitcoin’s price performance following previous halving events that occurred in 2012, 2016, and 2020. In each case, Bitcoin soared to a much higher price, setting a new all-time high in the process. . When the 2020 halving cycle ended, Bitcoin reached an all-time high of $69,000.
| 2012 | Close to $12 | $135 |
| 2016 | Close to US$650 | Close to $1,550 |
| 2020 | Close to $8,600 | More than $50,000 |
| 2024 | Close to $64,000 | ??? |
Of course, past performance is no guarantee of future performance. But it’s easy to see why so many analysts were expecting huge price gains for Bitcoin this year. Before the 2024 halving, there were three halvings, and each brought huge and outsized gains for Bitcoin.
What happened this time?
A number of reasons have been put forward to explain why gains in Bitcoin’s price have been so dismal since the recent halving. One possible explanation is that market participants had already priced in the effect of the halving. This makes a lot of sense if you believe in efficient market hypothesis. Investors have known the halving date for four years, so they were warned well in advance.
Another explanation involves the new Spot Bitcoin exchange-traded funds (ETFs). The introduction of these ETFs in January accelerated Bitcoin’s price appreciation timeline. Bitcoin typically reaches a new all-time high after halving. This time, Bitcoin reached a new all-time high in mid-March, almost a month before the halving. From this perspective, Bitcoin simply peaked too early due to the huge influx of money from new investors at the beginning of the year.
Image source: Getty Images.
Therefore, if you were hoping to become a Bitcoin millionaire overnight as a result of the halving, you will need to readjust your expectations. These things take time. And in the case of the Bitcoin halving, it could take up to a year to see the full impact. Take a closer look at the phenomenal returns attributed to Bitcoin’s first three halving cycles. It took 300 days or more to generate these amazing results.
Will Bitcoin ever reach $1 million?
It is encouraging that some Wall Street analysts are actually doubling down on their previous price predictions for Bitcoin. Investment firm Bernstein, for example, still believes Bitcoin will reach $150,000 by the end of next year. This implies more than double Bitcoin’s current price of $70,000. AND Cathie Wood of Ark Invest now believes that Bitcoin will reach a price of $1 million sometime before 2030, mainly due to the phenomenal success of the new spot Bitcoin ETFs.
When you look at the numbers Wood used to make his original $1 million price prediction, you can get a much better idea of how well Bitcoin needs to perform post-halving. In a bull scenario, she assumed 75% annualized returns for Bitcoin, which led to a final price of $1.48 million in 2030. In a bear scenario, she assumed 40% annualized returns for Bitcoin , which led to a price of $258,000.
These assumptions may seem incredibly high, but they are largely in line with Bitcoin’s past price performance. From 2011 to 2021, for example, Bitcoin delivered annualized returns of 230%. In 2023, the value of Bitcoin soared by more than 150%. And so far this year, Bitcoin is up 65%. So who says Bitcoin can’t generate annual returns of 75% or more?
Yes, it will take a lot for the definitive scenario of creating Bitcoin millionaires to happen, but it is not outside the range of possibilities.