Bitcoin Halving: History Won’t Repeat Exactly, But There Will Always Be Similarities
First, let’s talk about the main character of this idea: the Bitcoin halving. We just completed the fourth halving on April 19, 2024. Here’s a review of past halvings and what happened after they occurred:
November 28, 2012: Rewards dropped to 25 Bitcoins
July 9, 2016: Dropped to 12.5 Bitcoins
May 11, 2020: Cut to 6.25 Bitcoins
April 19, 2024: Now down to 3.125 Bitcoins
Now, things get even more fascinating. Let’s look at the price action during previous halvings:
First Halving - November 28, 2012
Price at Halving: ~$12
Sideways: ~1 year
Price at end of sideways: ~$100
Subsequent bull run high: ~$1,100 (November 2013)
Percentage increase from Halving to peak: ~9,000%
Second Halving - July 9, 2016
Price at Halving: ~$650
Sideways: ~0.5 - 1.5 years (depending on how you view the bull run)
Price at end of sideways: ~$1,000
Subsequent bull run high: ~$19,700 (December 2017)
Percentage increase from Halving to peak: ~2,930%
Third Halving - May 11, 2020
Price at Halving: ~ $8,600
Sideways: About 6 months
Price at end of sideways: About $10,000
Subsequent bull run high: About $69,000 (November 2021)
Percentage increase from halving to peak: About 702%
Current halving - April 19, 2024
Price at halving: About $64,000
Sideways: 5 months so far
The Great Sideways Theory: We’re in the middle of it
This is where my theory comes in. Because that’s exactly what we’re seeing right now: a sideways price action that is psychologically challenging for many investors.
Looking at the numbers, the pattern seems clear:
Initial Rise: We typically see a run-up in price before the halving.
The Great Sideways: After the halving, we enter a consolidation period of about 6 months.
The Breakout: After the sideways, the real bull run begins, leading to new all-time highs.