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As once again drawing attention, the concept of “halving” has become a crucial factor influencing cryptocurrency value and market dynamics. As a result, many market participants are providing their latest bitcoin price predictions.
Understanding the impact of the halving on Bitcoin is essential for investors. The Bitcoin halving occurs every four years. It is an event that halves mining rewards and reduces the supply of Bitcoin. As a result, the impact is hotly debated, with the leading cryptocurrency typically rising after the event.
What is the price of Bitcoin?
After previous halvings, the price of Bitcoin generally increased shortly after. However, it is rare to see BTC hit a new all-time high before the event.
Bitcoin hit a new high of over $73,000 last week, although it breached the $64,000 mark again over the weekend. However, it has now surpassed $68,000 again.
So far this year, Bitcoin is up over 61%, while in the last 12 months it is up over 152%.
Bitcoin Halving: Impact on Price
Speaking to Investing.com, Yuya Takemura, founder of Axys Holding, noted that Bitcoin halving events usually cause a price increase.
“The next halving in 2024 may continue this trend, possibly causing a significant price increase in 2025,” Takemura said. “Considering Bitcoin's past performance and growing adoption, a significant price increase in 2025 is plausible. Factors such as limited supply, growing institutional interest, and greater acceptance in payment systems play a role.”
Takemura also acknowledged that global recognition through ETF approvals, growing participation of Generation Z, and adoption of blockchain by authorized entities could impact the price. However, he warned that the Bitcoin market is volatile and susceptible to global economic conditions.
Meanwhile, Menno Martens, cryptocurrency specialist and product manager at VanEck, told Investing.com that “historical trends show that Bitcoin tends to recover before, during and after halving events.”
However, he said, “It should be noted that there are some exclusions, for example, Bitcoin also experiences significant corrections of over 82% and 80% during the third and second cycles, respectively.”
“Bitcoin price recovery to the previous ATH appears to be faster than previous cycles. The price of Bitcoin is already above the previous ATH, suggesting that this cycle may be different and making a significant correction likely,” warned Martens.
He believes what sets this particular halving apart is the introduction of a Bitcoin Spot ETF to the US market.
“While similar products, such as the VanEck Bitcoin ETN, have been available since 2020, the launch of a US spot ETF is considered by many to be a watershed moment for Bitcoin, similar to the IPO of a important asset,” he added. “Comparisons are made to the effect of ETFs on the gold market, where an eight-year bull run followed the launch of gold ETFs.”
Furthermore, Martens explains that ETFs play an important role in market dynamics, holding more than 4.2% of the Bitcoin in circulation and absorbing a considerable portion of the newly minted coins daily. As a result, he believes absorption may intensify after the halving, potentially reducing the supply of Bitcoin available to non-ETF investors.
“If demand remains high, as has been seen in recent weeks, this could, in theory, lead to significant price appreciation,” he said. “The risk is that Bitcoin could also suffer significant corrections.”
Bitcoin price prediction
Separately, in a recent research note, analysts at JMP Securities said they believe the price of Bitcoin could reach a high of $280,000 in the next three years, driven by anticipated Bitcoin ETF inflows.
“We estimate that after inflows of ~$10 billion to date, two months after launch, flows will actually continue to grow materially from now on for years to come, as ETF approval is just the beginning of a longer capital allocation process,” JMP wrote. .
The investment firm estimates around $220 billion of incremental flows into Bitcoin ETFs over the next three years.
“We estimate a current multiplier of ~25x, which based on our flow estimate would equate to an increase of $280,000 per Bitcoin,” they added.
Meanwhile, Bernstein said he is now “more convinced” of his $150,000 price target for Bitcoin.
“Bitcoin today is at $71,000, we expected this to skyrocket after the halving. We build institutional Bitcoin flows into our estimates to arrive at the price of Bitcoin. We estimate inflows of $10 billion by 2024 and another $60 billion by 2025,” the firm explained.
