This year is shaping up to be quite important for bitcoin and cryptocurrencies. 2024 is the year of probably the most important Bitcoin halving in history. According to analysts from Rekt Capital, there are 5 phases of Bitcoin halving. Experts say we’re currently in the first one—the pre-halving period—which is characterized by lucrative returns that follow major price drops.
Bitcoin’s price is currently on a roll. It has been since November when it experienced a 10%+ price surge after a relatively uneventful—even negative—period. As the halving nears, pre-halving rallies are expected which should ultimately raise the prices as investors capitalize on the hype.
Dips Coming Soon?
If history thought us anything, it’s that price surges before the halving are usually followed by major drops. That happened in 2016 and 2020. These pre-halving eras saw drops of 38% and 20% respectively, which isn’t good news for investors. However, those who invested early when prices were low will probably still see a good return on investment if the pre-halving prices continue to rise.
Anyone who’s willing to wait it out and is in cryptocurrencies for the long term will be rewarded after the halving. The post-halving period usually starts with a re-accumulation phase which is fueled by investor impatience and boredom. After that period passes, Bitcoin usually sees a parabolic uptrend and all-time price highs.
Many analysts are adamant that Bitcoin’s drops are no reason to panic. Most are optimistic about new all-time price highs by the end of this year. The halving on April 23 will play a large role in it. Scott Melker, known in the crypto community as the Wolf of All Streets, supports the Standard Chartered Bank’s opinion about a record-breaking Bitcoin price high by the end of 2024. The bank’s analysts believe that Bitcoin is headed on a $100,000 trajectory. The key drivers behind these predictions are the upcoming halving and the expected approval of a Bitcoin spot ETF in the USA.
It’s clear that this may be the year of Bitcoin, which is always great to hear. The world was disappointed with the price trends in the past years, especially after Bitcoin’s all-time high in November 2021. We’ve finally reached the point to be optimistic about the long-term future of cryptocurrencies, but there will be slight bumps along the way.
Why Halving Matters
Bitcoin halving is a major pre-programmed event that happens every four years. It’s called halving because the reward for mining a new Bitcoin block is cut in half every time the halving comes. This year, the reward for a block will be reduced to 3.125 BTC (current estimate). The halving will take place on April 2023, and may potentially be a key driver for a new positive price trend.
Of course, the halving doesn’t automatically guarantee a positive price movement. Every halving leads to tiny increases in Bitcoin’s circulating supply. Supply shocks may happen, but in 2024, all the trends point to a positive outcome.