• Bitcoin’s fourth halving is approaching and speculation has already begun on whether it will be followed by a bull run similar to the last two halvings.
• The halving event occurs every 210,000 blocks (appr. every four years) and reduces the rewards miners receive in order to slow down new BTC creation.
• In the past, such events have had positive effects on the asset’s price performance, as all three previous halvings were followed by price runs that saw an ATH marked in December 2017 and November 2021 respectively.
What is a Halving?
The anonymous developer Satoshi Nakamoto incorporated an event called the halving into the Bitcoin network, which occurs every 210,000 blocks (appr. every four years). This event causes a reduction of rewards that miners receive for creating new blocks in order to slow down the speed at which new BTC is being created.
Previous Halvings
Each of the past three halvings has been followed by increasing price runs for BTC, with an All-Time High (ATH) marked in December 2017 ($20,000) and November 2021 ($69,000). With less than a year until Bitcoin’s fourth ever halving, speculation has already begun on whether this one will be followed by similar bullish trends as those seen after previous events.
The Effect of Halvings
Halvings have had positive effects on the asset’s price performance due to basic economic factors; when supply slows down while demand remains or increases, valuation often rises accordingly. As such, many are anticipating that this next upcoming halving may result in another increase in prices for BTC.
Data Analysis
In-depth data shows that before and after both of last two halvings – 2016 and 2020 – Bitcoin peaked less than two years afterwards. It remains to be seen whether history will repeat itself again following this upcoming fourth event.
Conclusion
Ultimately it remains unclear how much influence these occurrences truly have on crypto markets but with each passing instance more evidence accumulates to suggest that there may indeed be a correlation between them and subsequent bull cycles like those seen before and after previous events