Cryptocurrencies have been on fire lately, and Bitcoin (BTC-USD) is no exception. In fact, the token just notched a fresh all-time high of $69,000. And we’re confident that this party is just getting started.
The long-awaited Fourth Halving is now just weeks away, and we think it’s finally time to buy crypto again.
Now, if you’re new to this sphere, you may be wondering what in the world this ‘Fourth Halving’ even is. Well, in short, about once every four years, Bitcoin undergoes a “halving” event, wherein the supply of new Bitcoin is essentially cut in half.
You may know that Bitcoin miners are rewarded with new BTC for validating transactions and adding them to the blockchain. But during a halving event, the reward miners receive for mining new blocks is halved. For example, if miners were receiving 12.5 BTC per block before the halving, they would receive 6.25 BTC per block afterward.
The purpose of halving is to control the supply of new Bitcoin entering the market. Bitcoin’s total supply is capped at 21 million coins. And these halvings ensure that the total supply is released gradually over time, rather than all at once, similar to the mining of precious metals like gold.
Bitcoin halvings are designed into the cryptocurrency’s protocol; they are part of its DNA, set to occur after every 210,000 blocks are mined, which translates to roughly every four years.
We’ve experienced three Bitcoin halvings since the inception of cryptocurrencies. The fourth is set to occur in just about a month, in April 2024.
This is extremely bullish for cryptocurrencies because historically, halving events have sparked “boom cycles” in the crypto market.
This Crypto Boom Cycle Has Lots of Runway Left
Theoretically, the reduced supply of new Bitcoin can lead to an increase in demand, which should drive up the price.
And indeed, in practice, this has been the case.
Bitcoin typically enters a boom cycle in the 24 months surrounding a halving event, soaring in the 12 months before and after.
The first halving occurred in November 2012. Between November 2011 and November 2013, Bitcoin’s price increased from $2.50 to $1,000.
The second halving was in July 2016. From July 2015 to July 2017, Bitcoin’s price rose from $270 to $2,500.
And the third halving occurred in May 2020. From May 2019 to May 2021, Bitcoin’s price jumped from $7,000 to $60,000.
Now here we are in March 2024, mere weeks away from Bitcoin’s fourth halving event. And BTC just reached a new all-time high of $69,000.
We think there’s no telling how high it could rocket once the Fourth Halving gets underway.
The Boom Has Already Begun
Historically, cryptocurrencies begin to rise about 12 months before a halving event. Then they keep soaring for another year afterward.
And over the past 12 months, Bitcoin has soared from $22,000 to $69,000 – completely consistent with its historical behavior.
If the pattern holds – and all evidence suggests it will – then Bitcoin could soar to above $100,000 by late 2024 or early 2025.
There are two big things to note here:
- It’s still early. We’re still in the first half of this boom cycle; the Fourth Halving hasn’t even happened yet. Since these boom cycles always last at least 12 months after a halving event, history suggests there should be at least 12 months of runway ahead.
- There’s huge upside potential on deck. The second halves of crypto boom cycles are always bigger than the first halves. That is, cryptos always rally more in the 12 months after a halving than they do in the 12 months before… and by an order of magnitude. Check out the chart below.
The Final Word on the Crypto Boom
Folks, to us, the data couldn’t be clearer.
We may be on the cusp of a massive crypto market boom like that of 2020 and ’21, when dozens of altcoins soared 1,000%-plus and made some folks a lot of money in a hurry.
Don’t miss your opportunity this time around.
Find out which cryptos to buy ahead of some major incoming gains.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
P.S. You can stay up to speed with Luke’s latest market analysis by reading our Daily Notes! Check out the latest issue on your Innovation Investor or Early Stage Investor subscriber site.
