Bitcoin Halving: 85% Done, Long Term Holders Supply Inches Toward Record Highs

2023-10-10, 06:19

We are about 85% closer to the next Bitcoin halving which will occur in April 2024.

About 76% of bitcoin circulating supply is in the hands of long-term BTC holders.

The price of bitcoin is likely to fluctuate between $45,000 and $180,000 in 2024.

Keywords: bitcoin halving dates, bitcoin halving countdown, next bitcoin halving, Bitcoin block reward, Bitcoin economic model, Bitcoin supply reduction, Bitcoin halving history, Bitcoin halving effects

Introduction

The crypto community is looking forward to the 2024 bitcoin halving event, with its anticipated benefits which include the potential for the start of the next bull market. Some long-term bitcoin holders still hold onto their BTC as they expect its price to rise within the next few months.

This analysis assesses how far we are from the next bitcoin halving event. We will also look at BTC’s price prediction for 2024.

85% of Time Has Passed Since the Previous Bitcoin Halving

The next bitcoin halving event will occur around mid-2024. The recent on-chain data indicates that we are more than 85% towards the next halving event which is expected to take place in April 2024.

Something interesting has also taken place. According to a crypto expert, by the X (formerly Twitter) username @therationalroot, the bitcoin supply which the long-term holders has is close to its record high, attained in 2015, which indicates that bitcoin is nearing its bottom. After the bitcoin macro-low BTC is likely to enter a new phase, the start of the next cycle.

The long-term bitcoin holders have their own way of behaving. Usually, they hold onto bitcoin even when the market is at its lowest point, referred to as the market bottom. Also, they acquire most of their bitcoin during severe bear markets when its price is low. As of now, most long-term BTC hodlers are unwilling to sell as they wait for better returns they can get after the crypto market recovers.

On the contrary, they behave differently during a bull market when the BTC price is high. During that period the rising BTC price entices the long-term holders to sell their holdings. In return, the short-term bitcoin holders purchase the BTC during the bull market as they aim to make quick returns. Therefore, during bull markets the short term holders will have the most BTC.

The next diagram shows the fraction of bitcoin that the long-term holders currently own.

Percentage of Bitcoin Supply the Long-Term Holders Own - Twitter

As The Graph, published by a crypto analyst (by X username @therationalroot) shows, the long-term bitcoin holders own about 76% of circulating bitcoin. This high ratio is almost equivalent to the one that existed in 2015, a few months before the 2016 bitcoin halving.

You can compare the ratio of bitcoin which the long-term holders had in the past as we edge closer to the next halving event. This is because @therationalroot superimposed the halving event periods on the graph. In the past, the long term BTC holders amassed such bitcoin several months before the event.

However, after the peak it takes about 12 months for the redistribution of the coins to complete. When the long term BTC holders start selling off their BTC holdings it will be a sign of the start of the next bull market.

Charles Edwards, with the username @caprioleio, said “The massive growth in long-term Bitcoin holders is comparable only with 2016. This step-change jump in Hodl Waves will have big consequences in 2024. Something we didn’t see in the last bull-run. That makes this cycle more similar to 2017, which saw 10X the price appreciation of 2020.”
As we go towards the next bitcoin halving BTC may move in a sideways manner for a period of 12 months.

2024 Bitcoin Halving Dates

According to the bitcoin economic model a halving event occurs after the mining of 210,000 blocks. It takes approximately four years to mine such a number of blocks. Since we last had bitcoin halving in 2020 the next one will be in 2024.

Although it is difficult to pinpoint the exact bitcoin halving dates for future halving events we can estimate the year in advance. Already, we have a clear bitcoin halving countdown as the next picture shows.

Bitcoin Halving Countdown- Binanceacademy

As the diagram indicates, there are 197 days before the next bitcoin halving, expected to occur in April 2024. As you also note, 811,075 blocks have been mined while only 28,925 remain.

Basically, the halving event results in bitcoin supply reduction. For instance, on the next halving event the bitcoin block reward will decrease from 6.25 to 3.125.

Past and Future Bitcoin Halving Events

The bitcoin halving history shows that we have already had three halvenings that occurred in 2012, 2016 and 2020 as the next diagram illustrates.

Bitcoin Halving History - Bybit

The image shows the previous three bitcoin halving events. However, on 3 January 2009 there was no bitcoin halving, it was the BTC launch date. The first BTC halving occurred on 28 November 2012 while the last one took place on 11 May 2020.

According to the bitcoin algorithms we still expect a total of 33 halvings which should take place between now and the year 2,140.

Bitcoin Halving History

Let’s look at greater details on the bitcoin halving history. The first block on the bitcoin blockchain, called the Genesis Block, was mined on 3 January 2009 by Satoshi Nakamoto, its founder. At that time the bitcoin block reward was 50 BTC.

It is important to note that 50% of the existing bitcoin were mined between 3 January 2009 and the first bitcoin halving that occurred on 28 November 2012 as the next picture indicates.

The First Bitcoin Halving - Stormgain

The 2012 halving reduced the bitcoin block reward from 50 BTC to 25 BTC. The second halving event which took place on 9 July 2016 resulted in a further bitcoin supply reduction from 25 BTC to 12.5 BTC. On the other hand, the third and most recent halvening which occurred on 11 May 2020 resulted in a decrease of the mining reward from 12.5 BTC to the current 6.25 BTC one.

Bitcoin Halving Effects

All the bitcoin halving events resulted in strong rallies. In each situation, the BTC rally started before the halving and continued for more than one year after that date. The next table shows the changes in BTC price after the halvings.

Bitcoin Halving Effects - Bybit

As you can see, after every bitcoin halving the BTC price increased significantly. For example, after the 2012 halving the Bitcoin price rose by over 8,500% from $12 to around $1,031.95 within one year.

After the 2016 halving its price rose from $650.96 to $20,089 during a period of about 526 days. Similarly, after the 2020 halvening the price of bitcoin increased from $8,787 to over around $66,000. These figures give bitcoin investors hope that the BTC price will rise by a similar margin after the next bitcoin halving.

Bitcoin Price Prediction for 2024

Many crypto experts and analysts predict that the price of bitcoin will increase remarkably in 2024 as a result of the next bitcoin halving.

For example, Tom Lee, the co-founder of Fundstrat Global Advisors, thinks that bitcoin will reach $180,000 in 2024 if the United States Securities and Exchange Commission approves bitcoin ETFs.

Arthur Hayes, the co-founder of BitMEX cryptocurrency exchange envisages that Bitcoin will surpass $70,000 in 2024. However, JPMorgan Chase, the asset management firm, estimates the bitcoin price to reach $45,000.

Other large crypto and investment management firms like Pantera Capital and Standard Chartered have forecasted a strong BTC rally. Specifically Pantera Capital estimates that the BTC price will be around $148,000 while Standard Chartered Bank, through Zodia Custody, its subsidiary, recently stated that the BTC price will rise above $120,000 in 2024.

Conclusion

The on-chain data shows that we are more than 85% from the recent halving to the next one which will occur in 2024. Already, the long-term bitcoin holders have amassed around 76% of the current BTC supply showing the crypto market’s preparedness for the next BTC halving. In the meantime, some analysts believe that the value of bitcoin will range between $45,000 and $180,000 in 2024.

FAQs about Bitcoin Halving

What is bitcoin halving?

Bitcoin halving is a programmed reduction in the block reward that the validators get for verifying transactions. The block reward is halved after 210,000 blocks are added to the bitcoin blockchain. It usually occurs after 4 years.

How much did bitcoin go after the last halving?

The price of bitcoin increased from $8,787 to about $69,000 after the 2020 halving. It attained an all-time-high of $68,789.63 in November 2021. Similarly, after the 2016 halving the price of bitcoin increased from $650.96 to $20,089.

How many more bitcoin halvings are left?

We expect a total of 33 bitcoin halvings which should occur between now and 2,140. Since 2009 to date there have been three bitcoin halvings which have reduced the block reward from 50 BTC to 6.25 BTC.

Is good halving good or bad?

Bitcoin halving is good since it reduces its supply which helps to control inflation. It also helps to increase its value over a long period which motivates people to invest in it.

Why does bitcoin apply halving every four years?

A bitcoin halving occurs after 210,000 blocks are added to the blockchain. Usually, it takes about four years to add such a number of blocks to the blockchain. Halving creates deflationary pressure which helps to push the price of BTC up over time.

Author: Mashell C., Gate.io Researcher

*This article represents only the views of the researcher and does not constitute any investment suggestions.

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