Should you invest in BTC before Bitcoin Halving Event 2024

Key Takeaways:

• Bitcoin halving is less than 300 days old, and the price has shown magnificent strength in recent times.
• The price before each halving has maintained a consolidated uptrend, and after the halving, it triggers a massive upswing.
• Investing in Bitcoin before the halving event has been profitable in the past; hence, a similar action may be expected during the upcoming halving.

What is Bitcoin Halving?

A block is a file that contains the transaction records on the Bitcoin network, and miners are required to solve a complex cryptographic mathematical problem to validate the block. This block is then added to the blockchain, and the miner is rewarded with newly minted BTC tokens. This process is called Bitcoin mining, which is nothing but supplying newly issued BTC into circulation. Halving is an event to reduce the new issuance of BTC tokens into the markets. 

The Bitcoin halving, which takes place every 210,000 blocks or every 4 years, is an event where the miner’s rewards are divided in half. Each new block generates 6.25 BTC, which will be halved to 3.125 BTC during the upcoming halving in March-April 2024.

So why is halving important? Why does it need to be done?

Bitcoin halving is an automated process that is pre-defined in the network’s algorithm. It is a core mechanism that controls the supply of new BTCs. Bitcoin was created with the main constraint of a managed supply, and halving the supply restricts the creation of new tokens, keeping the token as a deflationary asset. 

Besides, halving is very important to maintain inflation, as the growing popularity of Bitcoin has swelled the mining business and also increased competition between them. Once the issuance is restricted, the price of the token will be positively impacted, which may maintain a healthy upswing. 

Read More: Can Bitcoin Halving in 2024 Initiate a Bull Run?

History of Bitcoin Halving

Satoshi Nakamoto introduced Bitcoin to the world and also programmed it to curb inflation in the future by including a halving. The entire halving history can be mainly divided into 4 phases as follows,

• Pre-Halving Phase

Bitcoin’s genesis block was mined in January 2009, and the period until the first halving is considered the pre-halving phase. Bitcoin has no monetary value, and no real incentive was awarded to the miners to mine new BTC until BTC traded over the exchanges in 2010. Nearly 50% of the available Bitcoin was already mined in this phase, and the supply grew rapidly. 

• First Bitcoin Halving 2012

The first halving of Bitcoin took place on November 28, 2012; unfortunately, the BTC price remained largely unimpacted. However, after the first halving, the BTC price began to grow consistently. The BTC price soared above $1000 for the first time in 2013, which was followed by a prolonged consolidation after a pullback. 

• Second Bitcoin Halving 2016

The second halving occurred on July 9, 2016, with a massive BTC price increase. Although the correction also followed soon, the bulls regained their dominance and led the 2017-18 bull run that soared the BTC price beyond $19,000. However, many other factors also contribute to the rally, like the ‘ICO bubble’.

• Third Bitcoin Halving 2020

The third Bitcoin halving took place on May 11, 2020. It did not have any major impact immediately. The world was fighting a pandemic situation that shook the traditional markets as well as the crypto markets. However, by the end of 2020, a massive upswing began, which continued until the price marked a new ATH close to $69,000 in later 2021.

The next halving is scheduled to take place in March/April 2024 at block number 840,000, wherein the rewards will be halved to 3.125 BTC, and the new BTC created per day will reduce to 450 BTC.

Bearish Sentiments Surround the BTC Price Ahead of Halving

The Bitcoin price has been consolidating within a narrow region for the past few weeks, remaining between $30,000 and $31,000. However, the bulls are trying to hold the price above the crucial support that is required for the token to hold bullish momentum. Alongside this, external factors are also hindering the growth of the rally. 

Source: Tradingview

The Bitcoin price within the recent consolidation has formed a bull flag, which propels the price after a breakout. The price may extend the current consolidation for a while until it reaches the apex. Once the price reaches above the average levels of the channel, there will be a significant upswing to mark new yearly highs above $32,000. 

Before every halving event, the BTC price maintains a consistent trend in an ascending pattern. The price further begins with a healthy upswing 150 to 160 days before the halving event and maintains a similar trend afterward to mark a new high in the next few weeks. Although the price is trading within a narrow region, it may undergo a bullish breakout very soon. 

Read On: Bitcoin Price Prediction

Pros & Cons of Investing Before Halving

Bitcoin is about to undergo a massive upgrade in less than 300 days. The next halving is set to happen very soon, and many people may be debating whether or not to invest in Bitcoin at this time. However, many experts believe that it is always better to invest 6 to 7 months before the halving. As mentioned before, the BTC price is set to trigger a massive upswing soon after the event, which may even find a new ATH in the coming days. 

What Can You Expect From Bitcoin Price After Halving?

The historical event suggests the BTC price has always been positively impacted after the Bitcoin halving. After the first halving, the BTC price soared by more than 9000% to mark the first ATH above $1000. The second halving resulted in a jump of more than 3000%, reaching beyond $19,000. Lastly, after the third halving, the BTC price leaped long to mark the present ATH close to $69,000. The upswing prevailed for almost 1 year 3 months after each halving to reach the highs. Hence, a similar price action is expected in 2024 and a new ATH is expected to form somewhere by mid-2025. 

Read On: How often does Bitcoin price Fluctuates?

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