In April 2024, Bitcoin will undergo another halving — its quadrennial event slashing miner rewards. A rally is widely anticipated, supported by the evolving market structure. This halving cycle is fundamentally different — our guide summarizes common price projections and drivers that make it unique.

Bitcoin halving cycles

The halving of rewards cuts the number of newly minted bitcoins accordingly. This happens after every 210,000 blocks, creating a four-year price cyclicality. The previous halvings occurred in 2012, 2016, and 2020.

“Total circulation will be 21,000,000 coins. It’ll be distributed to network nodes when they make blocks, with the amount cut in half every four years. First four years: 10,500,000 coins. Next four years: 5,250,000 coins. Next four years: 2,625,000 coins. Next four years: 1,312,500 coins. Etc. . . .” — Satoshi Nakamoto, The Cryptography Mailing List, January 8, 2009

This event will diminish the profitability for miners, who process transactions using custom-made hardware (Application-Specific Integrated Circuits, or ASICs). In 2023, mining a single block profitably required at least $10,000-$15,000. Following the halving, the cost may soar to $40,000 per coin, according to CoinDesk.

When is Bitcoin halving 2024?

The reward, reduced from 50 BTC to 6.25 BTC per block, will shrink further to 3.125 BTC on April 19, 2024. You can watch the countdown using the Bitcoin halving clock here.

Bitcoin’s 4-year price cycles. Source: Pantera

Effects on price: Bitcoin halvings in context

While the scarcity narrative matters, there are more factors at play besides the contraction of supply. Lower inflation must theoretically boost demand, but its actual price impact may be limited.

• Slower minting decreases the inflation rate while ensuring the Bitcoin supply remains capped and finite (21 million). Disinflation appeals to crypto enthusiasts: unlike fiat and gold, Bitcoin is independent of centralized entities and natural reserves.
• Lower rewards promote the health and sustainability of the network. According to Digiconomist, the annualized consumption of 141.46 TWh is comparable to that of the entire Ukraine, with a carbon footprint similar to that of Oman (78.90 Mt of CO2).
• BTC is also susceptible to factors beyond the pace of supply expansion. These are drivers within and outside the blockchain industry: regulations, the Fed’s monetary policy, geopolitics, and more.

According to the efficient market hypothesis (EMH), if all traders know about the halving, the effects must be priced in. However, as Warren Buffet said over three decades ago,

“Investing in a market where people believe in efficiency is like playing bridge with someone who has been told it doesn’t do any good to look at the cards.’’

As noted by Grayscale, the changes in the supply structure are the only certainty. Halvings bring Bitcoin closer to its maximum supply, presenting a challenge for all miners.

That said, Bitcoin’s scarcity is also programmable and thus known in advance. Models linking it directly to price hikes may be flawed. Otherwise, Litecoin — another cryptocurrency with halvings — would have risen consistently after each halving, which is not the case.

Litecoin halving cycles. Source: NYDIG

Historical perspective: Macro landscape

The previous halvings were accompanied by fundamentals that underscored Bitcoin’s strengths as an alternative store of value or helped it benefit indirectly.

• In 2012, the EU was suffering from a profound debt crisis. By November 2013, BTC soared from $12 to $1,100.
• 2016 was marked by the Initial Coin Offering (ICO) boom, with over $5.6B flowing into altcoins. By December 2017, BTC rose from $650 to $20K.
• In 2020, amid the coronavirus pandemic, inflation fears ran high. By November 2021, BTC surged from $8.6K to $68K, reaching an all-time high of $69,044.77 on November 10. Its perception as a hedge played a significant role.

Bitcoin halving 2024: Clues from past performance

Past performance does not guarantee future results, and — as we have shown — the effects depend on drivers beyond crypto. Yet previous halvings offer certain clues to likely scenarios.

Timing of highs and lows

In theory, BTC rebounds from its low a long time ahead of the halving — typically, 12–16 months before, according to CoinDesk. Pantera analysts estimate the bottoming out normally happens 477 days before the event.

Uptrends occur before the halving and continue afterward. The duration of the post-halving rally is 480 days on average (ending at the peak of the subsequent bull cycle).

This time, the lowest low happened before the expected date (December 30, 2022). It came on November 10 ($15,742.44).

BTC halving rallies. Source: Pantera

If history otherwise repeats itself, the rally will cease in late 2025, according to Pantera’s newsletter.

Bitcoin halving 2024 prediction: Return to $69K soon?

During its three past halving cycles, BTC gained above 30% in the eight preceding weeks. As 10x Research Founder Markus Thielen stated, “Bitcoin rallies an average of 32%” over that period.

Given the current price of $52,456.77, a repetition of the same trend would push the price toward its ATH — $69K. The likelihood of that happening grows “the closer we reach the Bitcoin halving,” Thielen added.

Daily RSI

On February 19, 10xResearch reported that the daily RSI (Relative Strength Index) had crossed above 80. This momentum indicator gauges the pace and change of price shifts, with 70 pointing to a powerful upward momentum.

Historically, the 80 threshold presaged 60-day gains of over 50%. The last time BTC’s 14-day RSI went that high was in December 2023. As of February 22, it is at 70.88%.

Bitcoin halving 2024 and spot ETFs

This year, Bitcoin’s rally is being helped by the adoption of spot Bitcoin ETFs. As of this writing, the exchange-traded funds, which give exposure to the coin without the need to hold it directly, have amassed over $5B in net inflows collectively.

This influx not only supports investors’ high spirits. It also mitigates the selling pressure from block rewards (the possibility of all newly mined coins being sold).

As calculated by Grayscale, with the current 6.25 BTC per block, the annual pressure amounts to $14B (based on a price of $43K). After the 2024 halving, the total will ease to $7B, so less buy pressure will be needed to offset it.

Spot Bitcoin ETFs have already absorbed “nearly the equivalent of three months’ worth of potential post-halving sell pressure.” This took them just 15 trading days.

Cumulative Bitcoin ETF flow. Source: Farside Investors

2025 projections: $150K-$200K after Bitcoin halving

Due to the rally expectations, the market has typically risen in the buildup to Bitcoin halvings. As of February 22, 2024, predictions by experts and research institutions are generally optimistic with an average suggested range of $150K-$200K by mid-2025.

The BTC order book liquidity is the highest since October 2023, albeit below its levels before the FTX downfall. Unless the demand drops (the opposite of what is happening), cutting the supply of fresh BTC must bolster its price. Some analysts say the run-up to new ATHs has already started.

Bernstein suggests the pre-halving behavior reflects the looming supply squeeze and the growing demand for spot ETFs. The firm expects the price “to touch all-time highs in 2024” and peak at $150K by mid-2025.

Anthony Scaramucci, the founder of Skybridge Capital, projects a higher high of $170K or above by July 2025. Speaking to Reuters in January, he said,

“Wherever the price is on the day of the halving in April, multiply it by four, and it’ll reach that price in the next 18 months.”

To arrive at $170K, Scaramucci used a conservative starting point of $35K (price at halving). With the current price of $52K, this scenario takes BTC above $200K.

Meanwhile, the market cap of the pioneering cryptocurrency should rise to half that of gold as per his long-term estimates. That would require more than a sixfold increase from roughly $1T today to around $6.5T.

Skeptics: More drivers needed for ATH

Rachel Lin, co-founder and CEO of SynFutures, says the halving is “unlikely to drive a full-fledged bull run,” and unless crypto adoption grows significantly, “this alone isn’t enough to take us back to BTC’s peak of nearly $69,000, let alone surpass it.”

However, due to the United States elections, local regulators may “tone down their headline-seeking activities in this high-stakes year. As such, there ought to be less bad news on the horizon for crypto that has the potential to dent investors’ enthusiasm. This can possibly set the stage for the next bullish trend.”

Short and medium-term factors to watch

The halving is a medium-term positive factor. CCN’s Peter Henn has summarized the likely positives and negatives for BTC in the coming weeks and months.

• Growing institutional adoption is among the primary positives, along with the price rebound and positive technical indicators. However, adverse changes in regulation and the macroeconomic landscape, such as inflation hikes, may impact the sentiment.
• Reasons for caution on the mid-term horizon range from regulation to competing cryptos, including CBDCs. Hacks and other security breaches may damage trust in the market overall.
• Over the next 1–2 years, the coin may also rise on the news around the enhancements of the Lightning Network and its reinforced status as a store of value.

Bitcoin halving 2024 and miners

Miners continue securing the blockchain as long as the economic incentives are sufficient. Thus, the BTC price must be high enough to offset the costs — both during and after the halving.

Hash rate hit an ATH in 2023. Source: Glassnode.

Larger miners are proactively building up reserves — “the halving is baked into most” of these firms, as “they’ve been expecting and pricing the halving into their projections for years now,” according to SunnySide Digital founder Taras Kulyk.

Meanwhile, those with more expensive power and less efficient rigs may eventually have to shut down operations, considering their hardware investment and overheads. Driving operational efficiencies is mandatory for staying in business and capturing the post-halving upside.

The methods range from acquiring enhanced equipment to selling holdings on-chain to equity offerings. For instance, the Canada-based Hut8 is boosting site efficiency with tailored software and hopes to acquire more power plants. Following its recent merger with USBTC, the hash rate has almost tripled, reaching 7.3 EH/s (exahashes per second).

Marathon Digital, the top public miner by realized hash rate, has rolled out a hybrid equity offering for $750M. Core Scientific has recently closed an oversubscribed $55M equity financing round to return to solvency. It has also focused on keeping its hardware online, making the most of the available fleet.

However, CEO Adam Sullivan believes the Bitcoin network has a “self-healing nature” and will incentivize miners perpetually. As more rigs shut down and the hash rate drops, so does the proof-of-work difficulty. It compensates for the growing speeds and fluctuating interest in running nodes.

Bitcoin mining difficulty chart. Source: CoinWarz.

Mining difficulty — a moving average for an average number of blocks — increases when the pace of block generation becomes too high. Thus, the network self-adjusts, with leavers freeing up a larger block share to reward those who stay. Mining becomes more profitable for the remaining actors.

Rising transaction fees vs. miner revenues

The 2024 halving follows the launch of Bitcoin Ordinals. This protocol supporting Bitcoin NFTs (inscriptions) has brought new use cases, driving up transaction fees and developer activity. These effects provide additional reasons for optimism about the profitability and sustainability of mining moving forward.

In November 2023, the Ordinals frenzy pushed the Bitcoin transaction fees to a two-year high (over $37), causing them to exceed the gas price on Ethereum. Since then, inscription fees have repeatedly amounted to over 20% of miners’ revenue.

As of February 22, 2024, Bitcoin is among the top 3 chains by NFT volume. In December 2023, it emerged as a leader. Thus, Ordinals activity is a novel way of incentivizing miners and maintaining network security via higher transaction fees.

Growth in Bitcoin inscription fees. Source: Glassnode.

Share prices of publicly traded miners

High transaction fees have caused the shares of publicly listed miners to skyrocket. In late 2023, the firms reveled in windfall profits as miners’ income almost quadrupled compared to the two-year average.

Since then, the fees have dropped to just over $4. Yet mining stocks like Marathon Digital (MARA) and Cleanspark (CLSK) have outperformed BTC over the past three months, gaining 116.57% and 231.28%, respectively. They may also react positively to solid stock market performance.

Top 10 Bitcoin mining stocks by market cap. Source: companiesmarketcap.com

Top mining locations

In terms of the cumulative hash rate, the US leads the charge with 35.4% in 2023, as per World Population Review. It is followed by Kazakhstan (18.1%), Russia (11.23%), Canada (9.55%), and Ireland (4.68%). Previously the runner-up, China banned mining in 2021, with miners migrating to Kazakhstan in the aftermath.

Concerns about environmental restrictions

Bitcoin mining remains highly unsustainable — in 2023, it gobbled up as much energy as all of Australia, or seven times as much energy as Google annually (91 terawatt-hours).

In the US, the share in electricity demand ranges from 0.6% to 2.3%, comparable to entire states like Utah. Earlier this year, the Energy Information Administration obliged all US-based miners to detail their energy use. Its report states,

“Concerns expressed to EIA include strains to the electricity grid during periods of peak demand, the potential for higher electricity prices, as well as effects on energy-related carbon dioxide (CO2) emissions.”

Major news outlets like The New York Times have drawn attention to the “public harm” caused by large mining sites. The Biden administration has a crypto-critical stance, and the EIA has stressed that price surges incentivize more mining activity, resulting in higher electricity consumption.

Meanwhile, New York has implemented a two-year moratorium on launching new mining facilities unless they rely entirely on renewable energy sources. In Texas, miners get paid for curtailing operations at times of peak energy demand as part of a “demand response” program.

On-chain metrics: Positive long-term signs

Finally, let’s look at two technical indicators offering an aerial view of Bitcoin’s perception and potential price direction.

MVRV Z-score

MVRV is an oscillator comparing Bitcoin’s market value to the realized value, or its spot price to realized price. This graph visualizes market cycles and profitability, helping spot the periods when the coin is undervalued and overvalued.

Bitcoin’s MVRV Z-score graph. Source: lookintobitcoin.com

The peaks, volatility, and returns become less dramatic as the market matures. Amid the increasing adoption of the pioneering coin, its realized price has grown slower than in the past cycles. Thus, gradual climbs are becoming more likely than explosive surges, with a better potential for long-term growth.

Meanwhile, a sizable share of all bitcoins has been accumulated by HODLers. The long-term holder supply hit an ATH in late 2023, with whales still 0-bitcoin-whales-steer-clear-of-significant-short-positions-show-confidence-in-price-surge/">showing confidence in the asset this month.

Power Law Corridor

The Power Law Corridor shifts the focus from the current price to whether BTC is under or oversold. This charting tool creates a channel with two parallel lines — the lower and upper boundaries of the price range.

Moving above the line in the middle indicates an overbought condition, with the opposite showing an oversold state. Crossing the bottom line to the upside is a harbinger of further growth, with BTC typically reaching the middle line in 1–2 months.

Bitcoin halving 2024 price prediction: Power Law Corridor projection for February 17, 2025. Source: bitcoin.craighammell.com

According to James Bull, the overbought condition lasts for roughly 1.5 years (strong bull market), with massive bear market cycles stretching for 2.5 years. However, the model has its critics. As stated by its creator, Harold Christopher Burger,

“The observation that bitcoin follows a power-law is admittedly ad-hoc. In addition, there are other factors than just time that should influence bitcoin’s price, such as its scarcity,” but the “fact that the power-law fit works better and better in terms of the measure in the log-log plot is an indication that this might indeed hold.”

Wrapping up

Multiple factors beyond scarcity drive the Bitcoin price before and after each halving. The 2024 event comes amid massive Bitcoin ETF inflows, rising on-chain activity, substantial momentum, and general market maturation.

With the improving macro context, including the anticipated Fed interest rate cuts, Bitcoin seems poised to shine bright, moving up the Power Law Corridor. It has weathered the longest bear market, and large miners are well-prepared for the repercussions of reward cuts.

Our Bitcoin halving 2024 price prediction

EarnBIT’s analytical team sees BTC rising to $55K-$60K before the halving, with a range of $32K-$85K through the year. Past performance is no predictor of the future, and new black swans are always possible — but the broader context so far appears conducive to growth.

Disclaimer：

1. This article is reprinted from [EarnBIT], All copyrights belong to the original author [EarnBIT]. If there are objections to this reprint, please contact the Gate Learn team, and they will handle it promptly.
2. Liability Disclaimer: The views and opinions expressed in this article are solely those of the author and do not constitute any investment advice.
3. Translations of the article into other languages are done by the Gate Learn team. Unless mentioned, copying, distributing, or plagiarizing the translated articles is prohibited.