Why it’s a buy signal for investors

On April 20th, Bitcoin will undergo its expected halving.. This event, which occurs every four years, halves the mining reward, while the upcoming event will reduce the reward to 3.125 BTC. per block.

The timing of the halving is particularly interesting because it unfolds amidst a bullish trend in the price of Bitcoin. Analysts predict that this halving could have a significant impact on Bitcoin’s trajectory in the coming years.

Is Now the Best Time to Buy Bitcoin?

Bitcoin surged 67% in the first quarter of 2024, driven by increased demand for Bitcoin exchange-traded funds (ETFs). The significant price rise already experienced has now sparked discussion about the potential impact of Bitcoin halving.

Some analysts argue that Bitcoin is still undervalued and could possibly rise to $100,000 within the year. The asset’s impressive performance to date and the Fed’s expected interest rate cuts make this prediction sound reasonable.

“We could see a brief adjustment, but as central banks ease monetary policy, Bitcoin tends to behave more like a technology stock or a speculative asset, so we need to promote both direct Bitcoin sales and ETFs, and in general, we need to encourage easing of monetary policy. benefit from it. My estimates are that Bitcoin could reach $100,000 to $150,000 within 12-18 months after the halving,” Jason Fernandes, co-founder of AdLunam, told BeInCrypto.

Conversely, other experts suggest that the market has already factored in the halving. However, with the supply of Bitcoin expected to decrease and demand from Bitcoin ETFs steadily increasing, some see this as a good time to invest in Bitcoin.

Read more: Bitcoin Halving Countdown

NYDIG researchers argue that the impact of Bitcoin halving on prices may be minimal compared to the impact of ETF demand. As a result, they anticipate that the daily supply of around 450 BTC will not put much pressure on the price.

“While the halving event may not act as an immediate price catalyst, historical data shows that it plays a significant role in shaping Bitcoin’s price cycle. Typically, after a halving occurs, significant returns are generated following the event. Due to the current positive price-to-performance ratio, investors have reason to be optimistic about Bitcoin’s future potential,” wrote NYDIG’s Greg Cipolo.

Nonetheless, historical data shows that the rate of increase decreases with each half-life. After the first halving, Bitcoin surged from $13 to $652, a whopping 4,802% surge. Subsequent half-lives have a reduced rate of increase, suggesting a similar pattern this time around.

Read more: Bitcoin price prediction for 2024/2025/2030

Nonetheless, Fernandez told BeInCrypto that Bitcoin’s post-halving performance has varied due to various macroeconomic events.

“The 2012 Bitcoin halving event limited investment from tech-savvy individuals and niche communities. In 2016, we saw increased awareness of Bitcoin as an alternative currency that could withstand economic instability. The 2020 pandemic year was a somewhat unusual one, as half of it was offset by the dire overall financial situation. To summarize: I would say that the effects of the halving tend to be distributed equally among the macroeconomic factors that are prevalent at the time,” Fernandes explained.

The nuanced view highlights the broader consensus that while the immediate impact of the halving on BTC price is debatable, this event is important in setting the stage for future price cycles. Nonetheless, with energy costs rising, the main impact of this event will be on miners’ profitability.

However, according to insights from IntoTheBlock, miners’ profits, measured in USD, have now reached their peak due to the rising value of Bitcoin. If the halving spurs further value appreciation, the reduced rewards may have a negligible impact on miners.