Introduction
Bitcoin halvings are a scheduled reduction in the amount of Bitcoin rewarded to miners for each block mined. They occur every 210,000 blocks, or approximately every four years. The purpose of halvings is to reduce the supply of Bitcoin over time and make it more scarce.
Halving Returns
The following table shows the price of Bitcoin at the time of each halving, the price six months after each halving, and the percentage increase from halving to six months later:
As you can see, the returns following halvings have diminished over time. However, it is important to note that Bitcoin is still a relatively new asset class, and its price is highly volatile. It is therefore difficult to say with certainty what will happen following the next halving in 2024.
Factors Driving Halving Returns
There are a number of factors that can drive Bitcoin returns following halvings, including:
Reduced supply:Â Halvings reduce the supply of new Bitcoin entering the market. This can lead to higher prices, as demand for Bitcoin remains constant or increases.
Increased media attention:Â Halvings typically receive a lot of media attention, which can attract new investors to Bitcoin. This can also lead to higher prices.
Improved technology:Â Bitcoin technology is constantly improving, making it more secure and easier to use. This can also attract new investors and lead to higher prices.
2024 Halving
It is too early to say for sure what will happen following the next halving in 2024. However, the factors mentioned above could lead to another bull run in Bitcoin prices.
Conclusion
Bitcoin halvings are a significant event in the Bitcoin ecosystem. They have the potential to drive higher prices for Bitcoin, as they reduce the supply of new Bitcoin and attract new investors. However, it is important to remember that Bitcoin is still a highly volatile asset class, and it is impossible to say with certainty what will happen following the next halving in 2024.
