Prediction: The Bitcoin Halving Could Be a Millionaire Maker.

Investors are counting on the halving to send Bitcoin skyrocketing in value. But it hasn't happened yet.

It's fair to say that, until recently, the much-anticipated Bitcoin (BTC -0.68%) halving had largely been underwhelming. At the time of the halving on April 19 -- when Bitcoin mining rewards were cut in half -- Bitcoin was trading near $64,000. For much of the next month, Bitcoin traded down or sideways, even dipping below the $57,000 level.

But it's too early to give up on the halving's potential to juice Bitcoin's price. After all, most halving cycles last anywhere from 12 to 18 months, and there's still plenty of time for the halving effects to kick in. So, what can we expect from this halving in the months ahead, and just how much higher can Bitcoin go?

The biggest reason for optimism is Bitcoin's price performance after the previous halving events that took place in 2012, 2016, and 2020. In each case, Bitcoin skyrocketed to a much higher price, setting a new all-time high in the process. By the time the 2020 halving cycle was over, Bitcoin had soared to a then-all-time high of $69,000.

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. Prior to the 2024 halving, there had been three halvings, and each one brought huge, outsized gains for Bitcoin.

A number of reasons have been offered as to why Bitcoin price gains have been so underwhelming since the recent halving. One potential explanation is that market participants had already priced in the effect of the halving. This makes a lot of sense if you believe in the efficient market hypothesis. Investors have known the date of the halving for four years, so they had plenty of advance notice.

Another explanation involves the new spot Bitcoin exchange-traded funds (ETFs). The introduction of these ETFs in January sped up the timeline for Bitcoin price appreciation. Bitcoin typically hits a new all-time high after the halving.