The halving is over – Time to be realistic about Bitcoin’s future

The crypto community just witnessed Bitcoin’s fourth halving on April 20, setting the stage for what might be the most significant rally based on past market behaviors and the integration of spot Bitcoin ETFs.

Just a month ago, Bitcoin was smashing all-time highs, peaking at over $73,600 for the first time ever way before the halving. This milestone was reached far sooner than the 518 to 546 days it traditionally takes post-halving to hit new highs.

Analyzing Current Trends and Predictions

Renowned analyst Rekt Capital weighed in just hours before the event, speculating on when Bitcoin might hit its next peak in the current bull market. According to his analysis, the typical cycle suggests a peak might occur between mid-September and mid-October 2025.

However, Bitcoin’s recent performance might tell a different story. The cryptocurrency has not only peaked early but also shown signs of a speedier cycle, achieving its new all-time highs roughly 260 days sooner than expected.

Despite this rapid climb, there has been a noticeable slowdown recently, with the pace decelerating by 30 days. Rekt Capital points out that this adjustment in speed could potentially halve the expected duration to reach the bull market peak, possibly setting the next high between December 2024 and February 2025.

On the trading front, Bitcoin saw a 6% drop in its weekly chart, trading around $63,500. While it only gained 3% in the past month, it has surged over 50% since the start of 2024, breaking not one but two all-time highs.

This somewhat sluggish monthly performance coincided with a decline in Bitcoin accumulation across ten U.S. spot Bitcoin ETFs, where net inflows reversed, causing in $398 million in net outflows during the halving week, a sharp contrast to the $199 million in net inflows from the week before.

The Technical Side of the Halving

The halving event itself reduced the block rewards from 6.25 BTC to 3.125 BTC, effectively halving the Bitcoin issuance rate, a change hard-coded into Bitcoin’s protocol that occurs every 210,000 blocks, or approximately every four years.

This reduction, which started with the first halving in 2012, has progressively lowered the issuance rate from 50 BTC to the current 3.125 BTC, with the intent of diminishing the supply and reinforcing Bitcoin’s stature akin to gold.

Comparatively, Bitcoin has outperformed traditional assets, having risen 122% over the past year, while gold saw a 19% increase. At press time, Bitcoin’s year-to-date increase is just over 51%, outpacing gold’s 15% rise. This performance might have influenced trading sentiments, as suggested by JPMorgan and Deutsche Bank, who anticipate varying impacts on Bitcoin’s price post-halving.

The halving not only affects market prices but also heavily impacts miners who are vital to the Bitcoin ecosystem. The reduced block reward means less Bitcoin for miners, yet this could be offset if Bitcoin’s value continues to rise, as has been the case historically.

The overall Bitcoin network hash rate tends to dip following a halving but usually recovers within a couple of months. This resilience in the hash rate, coupled with high Bitcoin prices, has kept mining profitable, despite the reduced rewards.