Bitcoin halving: Timing and price impact

Regarding the halving of Bitcoin, two categories of forecasts might be made. The first is about when it will happen, and the second is about how the price will be affected by the halved.

Forecasts for the halving date of Bitcoin

One thing is for sure: as soon as block 840,000 is reached, there will be a Bitcoin halving.

In reality, a halving is required to happen precisely every 210,000 blocks according to the Bitcoin protocol itself.

There are less than 20,000 blocks remaining before the next halving, as about 820,000 blocks have been mined thus far.

The exact time that elapses between one block and the next is not fixed, so it is unknown when the block that would initiate the fourth halving will be mined.

Theoretically, it would take fewer than 140 days (just over 4 and a half months) to mine 20,000 blocks, with an average of 10 minutes between blocks. In actuality, though, the “blocktime”—that is, the average amount of time between mining a block and the next—is frequently less than ten minutes these days.

For instance, just seven times in the previous thirty days was it over ten minutes; the other thirteen times it was noticeably below. In just 67 days, it was possible to mine the last 10,000 blocks, resulting in an average blocktime of slightly more than 9.6 minutes during the previous two months.

It would still take 134 days to reach block 840,000 at this rate, thus theoretically the next Bitcoin halving might happen on April 18, 2024.

Nevertheless, the blocktime can go even shorter and might even occur a few days sooner if the hashrate keeps rising.

Prior halvings

Thus far, three halvings have occurred: the first occurred at block number 210,000, the second at block number 420,000, and the third at block number 630,000. Undoubtedly, the fourth will occur at block 840,000.

November 28, 2012 was the first event, and 1,319 days later was the second. There is no consistency in these timeframes, with the third occurring 1,402 days following the second.

A record-breaking 1,438 days would have elapsed since the last one if it were to occur on April 18 of the following year. It is therefore conceivable that it will occur before to that date.

At this time, though, it is unlikely that it will occur in May unless there is a way to move it up to March. April 2024 is a good month for Bitcoin’s fourth halving.

The effect on Bitcoin’s price

Only Bitcoin is paid to miners who complete blocks; most of this money originates from rewards given to those who successfully complete a block. As of right now, the prize is 6.25 BTC, which will be half in April 2024.

However, because they use a lot of electricity, miners must pay extremely expensive prices for their work. This means that in order to pay for the high costs with the fiat currency they receive from this sale, they are frequently obliged to sell a large portion of the Bitcoin they accumulate.

Stated differently, a significant portion of the Bitcoin that is generated every day and distributed to miners as a reward is eventually resold on the market.

The amount of Bitcoin that miners typically sell on the exchanges each day will therefore abruptly drop dramatically as a result of the halving.

It should be noted, though, that 155 Bitcoins are made every day on average, and at the present price, they are worth roughly 6.8 million USD. This amount will be halved beginning with the halving in the next year, although it is negligible in comparison to the daily trading volumes of nearly 40 billion dollars in bitcoin on the spot market.

As a result, the long-term effect on pricing should be negligible, but it increases in importance throughout the year. Actually, at the present pace of creation, about 57,000 Bitcoins are created annually, with a total market worth of about 2.5 billion dollars at current exchange rates. This is already a substantial amount that might affect the markets.

Forecasts for the price of bitcoin before the next halving

It is very hard to predict how the April halving of Bitcoin would affect its price. Past halvings, though, can be useful.

In actuality, three major speculative bubbles burst in the years that followed the halvings in all three situations (2013, 2017 and 2021). It is also no accident, for the reasons outlined above, that these bubbles started to blow up months following the halving.

A lot of people think that something similar might occur again, to the extent that the recent sharp price increase might also be the result of the markets beginning to price in this unlikely scenario.

Nonetheless, it is already a given that the halving will occur, and it is very likely that it will do so in April. It’s probable that they have already begun pricing it in at this point, since markets tend to price certain future occurrences ahead of time.

That being said, this impact will undoubtedly not be fully priced in advance because it is still unknown exactly what effect the price halving could have. Stated differently, pricing will only be applied to the announcement of the halving and not necessarily to the resulting price impact.

What can be said, though, is that we could anticipate a subsequent peak at about $180,000, most likely at the end of 2025 or possibly even as early as 2024, if the growth trajectory of the maximum peaks of the price of Bitcoin is respected ($1,100 at the end of 2013, $20,000 at the end of 2017, and $69,000 at the end of 2021).

Given that the markets appear to have already begun to price in the halving (which had never happened before), we should not ignore the theory that this time the bullrun could be accelerated by a year.