What will the next Bitcoin halving cycle bring?
This is branded content.
Data by exchanges shows that around 4.6 million Australians hold cryptocurrencies of some description, and Bitcoin is the most popular.
If you're one of the Aussies holding the dominant coin, it's about time you learned about the Bitcoin halving cycle and what it means for your investment.
What is the Bitcoin halving event?
The Bitcoin halving event is exactly what it sounds like - it reduces the total supply of Bitcoin by 50 per cent.
This profitable event is hard coded into Bitcoin's infrastructure, which means it'll never stop until the total supply reaches 21 million Bitcoins.
When a coin's supply is reduced, it means each holder has a larger percentage of the coin, which in turn makes it more valuable.
Even though nothing is guaranteed in crypto because of its high volatility, history has taught us that Bitcoin's halving leads to an increase in value and the start of a bull run.
An Overview of Past Bitcoin Halving Events
When Bitcoin's total supply reached 10,500,000 in November 2012, it set off the first Bitcoin halving event that led to a boost in market value.
This event was followed by a halving in 2016 and 2020, which means the next event will take place in 2024.
If you're not already holding Bitcoin in your crypto portfolio, now is the time to start investing.
Australians can buy Bitcoin (BTC) via CoinSpot, the largest crypto trading platform in the country, and we suggest using a dollar-cost averaging (DCA) strategy to help manage value fluctuations.
How Bitcoin Halving Impacts Crypto
If you analyse price charts from the first two Bitcoin halving events, you'll notice the following two patterns taking place:
- Bitcoin's value begins to increase around one year prior to the halving.
- Bitcoin's value decreases around one year following the event, and it continues until the next one.
Throughout the most recent cycle, which began on May 11 2020, the same pattern occurred and Bitcoin along with many other cryptocurrencies reached their all-time high, with the following events taking place during the May 2024 Bitcoin halving event:
- A continuing increase in Bitcoin's value during Q4 2023 and Q1 2024.
- A potential bull run starting prior to May 2024.
Making a Profit During a Bitcoin Halving Cycle
Bitcoin halving changes the total supply of Bitcoin, which is proven to kickstart an increase in value. Given how influential Bitcoin is in the crypto market, it's also enough to ignite a bull run.
In the past, Bitcoin's value started to rise around one year before the halving, which means the best time to buy is when the coin hits the bottom.
Even though the bottom has already taken place during the current cycle, there are still several months to begin accumulating Bitcoins.
With a DCA strategy, invest what you can afford and then reap the rewards between 2024 and 2025; just make sure you withdraw before the plunge.
