With the fourth Bitcoin halving less than two months away, many traders need to take their eyes off Bitcoin charts to see whether this year's boldest BTC price predictions (and before the halving in particular) will come true.
At various points at the start of this year and the end of 2022, multiple influential personas in the world of cryptocurrencies and traditional financial assets made ultra-bullish predictions, trying to foresee how high the Bitcoin price could go.
But first of all, it is necessary to clarify what Bitcoin halving is, how it works, and why it is so vital for Bitcoiners.
What is Bitcoin halving?
Bitcoin halving happens once every four years. This "event" is built into the Bitcoin code, and its goal is to make BTC a deflationary cryptocurrency. Bitcoin works based on the proof-of-work algorithm for verifying BTC blockchain transactions. This is done by those who call themselves "miners," which requires a lot of computation power these days. Miners use graphics cards or specially made devices for this, produced by Bitmain, and other companies focused on building this gear, particularly for saturating miners' needs.
Miners verify transactions, thus gradually generating new blocks, and once every new block is found, they receive a certain amount of Bitcoins as a reward. Every four years, when a halving (it is also often called "halvening") occurs, miners see the number of the minted Bitcoin for each block decreasing by half, hence the term "halving."
Here are the years in which earlier BTC halvings occurred: 2012, 2016, 2020. Four years since 2020 will end in mid-April this year – this is when the next fourth halving is scheduled. After the third halving event, the number of Bitcoins generated after each new block amounted to 6.25 BTC (roughly 900 BTC per day). After miners' rewards are cut down in April this year, the number of new Bitcoins per block will equal 3.125 BTC and 450 BTC per day, respectively.
Aside from Bitcoin, several other cryptocurrencies launched right after BTC run on the proof-of-work consensus algorithm – Litecoin (LTC), meme crypto Dogecoin (DOGE), Dash (DASH), privacy coin Monero (XMR), Bitcoin Cash (BCH), and many others.
Bitcoin price behavior stimulated by halvings
Bitcoin price usually starts increasing substantially after every halving, not immediately, though - a significant rise may happen one year after that or even later. This is explained by the decline of the circulating BTC supply – twice as few Bitcoins get injected into the market.
Thus, every halving event adds scarcity to Bitcoin as an asset. This is especially important because the overall supply of BTC that can be minted is limited to 21 million coins rather than a single coin.
Bitcoin price predictions for 2024 halving
Many experts consider the halving this year a special one and make their predictions correspondingly since the halving event is not the only mega-bullish driver expected to occur this year.
This second primary driver is the approval of spot Bitcoin ETFs (exchange-traded funds). These assets monitor Bitcoin price performance and allow users to invest in Bitcoin indirectly, without actually buying BTC and going through the difficulties of holding it – keeping it in cold wallets or on exchanges, securing passwords and seed phrases, etc.
Last year, eleven major investment companies filed with the US Securities and Exchange Commission (SEC) for launching spot-based Bitcoin ETFs. Among them were Fidelity, Grayscale, Ark Invest, and the world's most renowned fund manager, BlackRock. In the middle of January, the SEC finally approved those filings after several delays. After trading started, ETF providers began purchasing large amounts of Bitcoin, many times more BTC than miners generate daily.
Hence, Bitcoin is being swept off the market very quickly, creating a demand shock and making BTC more scarce than before, even when the halving has not taken place yet.
Some of the boldest price predictions were made for Bitcoin before the halving, but many cover the time frame until 2025. Among the experts who predicted the highest price rises were Mark Mobius ($60,000), Bit Mining ($75,000), Nexo and Standard Chartered Bank ($100,000), Robert Kiyosaki ($135,000 - $500,000), Maxiport ($125,000), CoinFund ($250,000 - $500,000).
