Bitcoin ‘halving’ due next year Spurs predictions of rally in token after $50,000

by James · April 23, 2023

(Bloomberg) — Bitcoin’s setback is just the start of a rally that will take it past $50,000 next year thanks to a process known as halving that limits the supply of new tokens, according to crypto analysts.

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The largest digital asset has climbed 70% since December 31 in a partial revival from an epic rout in 2022. While the token is currently struggling near $30,000, a halving has the potential to trigger an advance of at least 78%, according to Bloomberg Intelligence and Matrix port.

A halving – or halving – cuts in half the amount of tokens that Bitcoin miners receive as a reward for their work. The quadrennial event is set to take place around April 2024 and is part of the process of limiting the Bitcoin supply to 21 million tokens. The coin broke records after each of the last three halvings.

The upcoming halving is currently 50% priced in based on previous cycles, said Jamie Douglas Coutts, a Bloomberg Intelligence analyst. Coutts predicts Bitcoin could scale $50,000 by April 2024.

“Bitcoin cycles bottom around 12-18 months before the halving, and this cycle structure is similar to the previous ones, although many things have changed – while the network is much stronger, Bitcoin has never endured a prolonged severe economic contraction,” he said.

Bitcoin’s bounce has sputtered recently, capped by cooling expectations of interest rate cuts from the Federal Reserve amid persistent inflation. A US regulatory crackdown on crypto in the wake of the November 2022 FTX exchange collapse also threatens to cloud the market outlook.

FTX low

“If the collapse of FTX was indeed the bottom of this cycle, then history would suggest that we still have about 350 days of ‘accumulation’ before we see the characteristic post-halving price action,” said Jacob Joseph, analyst at CCData.

Markus Thielen, head of research at Matrixport, said in a recent note that Bitcoin will reach around $65,623 by April 2024 – more than double its current price.

Bitcoin is still about $41,000 down from its all-time high of nearly $69,000 in November 2021 — which came 18 months after its halving in 2020. Crypto markets crashed last year as central banks raised interest rates to ease price pressures and digital asset companies imploded.

“Bitcoin may again reach a new all-time high in the future, but is unlikely to see the same growth as previous cycles due to increased market size and competition from other digital assets,” CCData’s Joseph said.