BTC will surpass $100K after the 2024 BTC halving Event

Will halving BTC in 2024 bring a bull market?
Understanding of The Fourth BTC Halving

[TL; DR]

- Pantera Capital predicts that the price of bitcoin will be around $149,000 after the 2024 halving event.

- Glassnode concluded that the price of BTC will surpass $100, 000 after the 2024 halving.

- In the past, bitcoin rallied by a large percentage after every halving event.






Introduction

With the current bear market, probably the longest of all times, still ongoing investors anticipate a quick and strong recovery. That is the reason why the 2024 bitcoin halving is a much awaited for crypto event. bitcoin halving reduces the reward for miners by half, thereby decreasing BTC emission to the market. This also reduces its inflation. In all, halving should result in a remarkable increase in the price of BTC.

Basically, bitcoin halving takes place every time miners add a total of 210 000 blocks to the bitcoin blockchain. In the past, these events took place after every 4 years. For example, the first halving occurred in 2012 and was followed by another one that took place in 2016. The last halving occurred in 2020 and reduced the mining reward to 6.25 BTC.

Since the inception of bitcoin in 2009 until 2012 the reward for adding a block to the bitcoin blockchain was 50 BTC. However, this was reduced to 25 BTC in 2012 before it was further slashed to 12.5 BTC in 2016. Finally, it decreased to the current level of 6.25 BTC after the 2020 halving event.

In the past, each bitcoin halving event was followed by a huge rally that extended over a long period. For instance, after the 2012 halving event the price of BTC rose from $12.25 to $127 within 150 days. Similarly, the 2016 halving resulted in the price of BTC to rise from $650.63 to $758.81 in 150 days as well. Finally, the 2020 halving event led to a sharp price rise of BTC from $8821.42 to $10,943.00 in 150 days.

With such BTC rally following the previous three halving events, many investors expect the same reaction in 2024. Analysts believe that the 2024 bitcoin halving event will take place on 20 April which will result in a reduction of the miners’ reward from 6.25 BTC to 3.125 BTC.

The Impact of the 2024 halving event on the price of BTC

As mentioned, in 2024 the reward for adding a block to the blockchain will decrease from 6.25 BTC to 3.125 BTC. If the demand for BTC remains constant or increases its price will surge. In the past, the price of BTC increased sharply as we moved towards the halving event.

However, before any halving event there had been a trough of about 1.3 years. Thereafter, the market took about 1.3 more years to reach the peak. Concluding from these past events, it shows that the whole process takes about 2.6 years, from the start of the trough to the time of its full impact.

Also, based on the past events, bitcoin bottomed for about 477 days before the halving event. It also took an average of 480 days from the date of halving to the peak of the next bull cycle.
According to the findings of Pantera Capital, an asset management firm, the price of bitcoin in the current cycle will trough on 30 December 2022. If history repeats itself, bitcoin will experienced a rally up to early 2024. The following graph shows BTC’s price development up to 2025, if there is a repeat of the same cycle.

As you observe on the diagram, the price of BTC will rise to about $35,638 in 2024 and around$148,636 by the end of 2025.

Pantera Capital based these findings on the stock-to-flow price projection. The first aspect Pantera considered was the reduction in supply of the mined bitcoin. There had been a reduction in the ratio of supply of bitcoin after each halving. You can see the figures in the following table.

As you note, in 2016 there was a 43% reduction in new supply of BTC and in 2020 it was 47%. Pantera concludes that if the past trend is to occur as we move towards 2024, the price of bitcoin will be about $36 000 before the halving event. Based on this, it concludes that the price will rise to $149,000 as indicated in the table.

Glassnode Findings

Glassnode, a blockchain research firm, used a similar method, bitcoin Stock-to-Flow Ratio, to predict the price of bitcoin following the 2024 halving event.

The above graph indicates that the price of BTC may rise above $100, 000 after the 2024 bitcoin halving event.

Previous price increases after halving events

After the 2016 halving event, the price of BTC increased by 506%. However, after the 2020 one it spiked by 517%. Therefore, the average of the two is 511.5%. If bitcoin attains the anticipated price of $36 000 by the end of 2023, its price may rise to around $184,000 if it increases by the average percentage, 511.5%.

Plan B calculations
PlanB, the analyst who first used the bitcoin Stock-to-Flow Model,also made his prediction using the same model. As such, he used the following formula to calculate the possible price of bitcoin after the 2024 halving.

Stock-to-Flow (SF) Ratio = stock ÷ flow

In the calculations, he used 328,725 BTC as the current annual supply of bitcoin, a circulating supply of 18.8 million and a flow of 0.33 million bitcoins. The result of the calculation is an SF ratio of 57.712. With this, he concluded that the BTC’s S2F ratio may rise to124. This calculation supports the prediction that the price of BTC will be above $100,000 after the 2024 halving event.

Conclusion

Many investors want to know the possible price range of bitcoin after the 2024 bitcoin halving event. PlanB and Glassnode predict that BTC will rally and surpass $100,000 in 2024. On the other hand, Pantera Capital was more specific as it predicts that the price of BTC will be about $149,000 in 2025 after the full bull cycle.




Author: Mashell C., Gate.io Researcher
This article represents only the views of the researcher and does not constitute any investment suggestions.
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