Summary
TLDR: Bitcoin halvings historically led to new all-time highs, but the upcoming halving broke that trend as Bitcoin hit $70,000 before it. Previous halvings in 2012 and 2016 led to price increases after initial drawdowns, while the 2020 halving saw Bitcoin’s price rise from $8,500 to over $40,000. The next halving in April 2024 comes after Bitcoin reached an all-time high of $73,000, marking uncharted territory for halvings.
Key Points
1. Historically, every Bitcoin halving — a disinflationary mechanism inscribed in the currency’s code by Satoshi Nakamoto — has come a year or two before a new all-time high.
2. This is partly because a halving cuts the block reward paid to miners in half, reducing the number of new bitcoin being created and theoretically making bitcoin more scarce.
3. For example, with the latest halving to come, the block reward will fall from 6.25 bitcoin (BTC) to 3.125 BTC.