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Cryptocurrency investors have seen Bitcoin hit record price in 2024. In March this year, the most well-known digital asset in the world was valued at $73,750 – a figure it had previously not achieved in nearly two decades of existence.
Bitcoin’s all-time rise in the early months of the year is an incredible recovery from the bear run it experienced in 2023. Interestingly, though, the current Bitcoin to US Dollar value hovers around the $52,000 mark.
Regardless, the coin’s impressive performance at the start of 2024 and the much-awaited halving event in April have led investors to anticipate a surge in Bitcoin's value towards the $100,000 mark.
In this article, we explain Bitcoin halving, the effect it has on the cryptocurrency’s price, and whether we'll see Bitcoin reach $100,000 in 2024.
What Is Bitcoin Halving?
Like most assets, Bitcoin’s value is largely controlled by demand and supply. These economic principles are the logic behind the Bitcoin halving event.
Bitcoin halving is an occurrence written into the coin's program by Satoshi Nakamoto – the cryptocurrency's creator.
Nakamoto designed the digital coin with a finite supply. Only 21 million bitcoins are in existence, with some 19 million currently in circulation.
New Bitcoins enter the market through a process called mining. Bitcoin miners solve complex cryptographic puzzles to validate transactions and add new blocks to the blockchain.
They receive new Bitcoins as rewards for their efforts. When the cryptocurrency first entered the financial industry in 2009, miners received 50 bitcoins for each new block.
However, a block is added to the blockchain every ten minutes, triggering fresh supply of Bitcoin in the market.
To sustain the scarcity of the digital coin and reduce inflation, the amount of Bitcoin given to miners is halved after 210,000 blocks are created – or once every four years.
Since 2009, there have been four halving events, with the most recent one occurring in April. So, miners currently earn 3.125 Bitcoins for every new block added to the blockchain.
How Does the Halving Event Affect Bitcoin’s Price?
Bitcoin's price after a halving event reflects the interactions between demand and supply. The logic is simple: a halving basically reduces the supply of new Bitcoins in circulation, but the demand remains the same.
With lesser supply and no changes in demand, the value of Bitcoin typically increases after every halving event.
Interestingly, prior to the first halving in 2012, investors couldn't predict the rise in Bitcoin's price due to the reduction in block rewards.
However, after experiencing the surge in the asset's value as a result of the debut halving event, the next ones came with much excitement and investment activity.
The months preceding each halving event since 2012 has seen the demand for Bitcoin increase among investors, as they anticipate an increase in the coin's value.
The heightened demand, mostly fueled by the fear of missing out, further combines with the limited supply to drive Bitcoin's price to incredible figures.
Will Bitcoin Rise to $100k in 2024?
In the three halvings preceding April 2024, we've seen Bitcoin's value rise by 5466.67%, 1216.42%, and 627.27%. Of course, it's not always straightforward.
For instance, after the second halving in July 2016, the price of Bitcoin fell by 10% before rising to the level it was before the event.
Investors didn't see an immediate increase in the asset's value until months after the halving. By July 2016, Bitcoin’s value was 284% higher than it was the previous year.
The next halving in 2020 saw a bull run for an entire year until 2021. In fact, the price of Bitcoin after the third halving event rose from around $8,000 to more than $56,000.
Interestingly, we're yet to see a surge in Bitcoin's value after the April halving event. Days after halving, Bitcoin traded above the $65,000 mark. However, the cryptocurrency currently sits around $58,000.
Following the trends, though, we would need to review the value of Bitcoin longer than a couple of months (possibly till the end of the year) to determine the true effect of the April halving.
Nonetheless, Bitcoin has risen by 125% on average across the three halvings prior to this year. If we apply this figure to the value of Bitcoin at the beginning of 2024 (assuming this halving event plays out like the rest), we could see the cryptocurrency hit the $100,000 mark by the end of the year.
Conclusion
Like all halving events before it, the April 2024 Bitcoin halving came with much frenzy among the media and investors.
Since the digital coin has already hit record levels in March, the expectation is that the reduction in new Bitcoin supply alongside heightened demand will lead to a rise in value somewhere around the $100,000 mark.
While these predictions are based on previous events, it's worth remembering that the market is volatile and can spring some surprises.
Could this be the halving that bucks the trend, or will Bitcoin eventually reach $100,000 by the end of the year? At the moment, the cryptocurrency is still trading below $60,000, so we may need to monitor it a bit longer. Investors will hope that the April 2024 halving event will yield similar results like those before it.
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Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.