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Bitcoin Halving is one week away here are some things you should know

Submitted by Joey Wagner on Friday, April 12, 2024 - 17:45.

The next block reward halving is currently set to occur on April 19th — 20th besides rolling a joint for 4/20 what should you do as an investor/trader to prepare for this day? While the price of Bitcoin usually rises in the 12 to 18 months following a halving event. While an observable trend of less of a rise after each halving on a percentage basis, the upcoming halving still holds the potential for a massive increase in price that is not to be scoffed at. 

Let us look at the price on the day of the previous three halving events;

  • $12.35 (November 2012)
  • $650.63 (July 2016) *52x
  • $8,821.42 (May 2020) *13.5x

The price difference on the day of halving between the first and second one is approximately 52x, the number of weeks in a year. The difference between the second and third is roughly 12x, the number of months in a year. The upcoming event will according to the formula below predict around a 7x price appreciation, the number of days in a week. 

One Formula to rule them all

Empirical data suggests that Bitcoin's price is governed by a certain formulaic mechanism. Consequently, I hypothesized that Bitcoin's price trajectory may exhibit a comparable, somewhat predictable, pattern.As such, I came up with this equation back in 2022;

₿$ = (AE x PR) + 7%

  • ₿$ = Bitcoin price at the next halving event in USD.
  • AE = Bitcoin’s price at the last halving event in USD.
  • PR = Previous block reward.

Below I have entered the values for the next halving event and solved for ₿$.

  • ₿$=($8,821×6.25)+7%
  • ₿$=$55,131+7% 
    • $55,131 x 0.07 = $3,859
  • ₿$=$55,131+$3,859
  • ₿$=$58,990

According to my formula Bitcoin’s price at the next halving event will be around $58,990.

formula price prediction

A lot of people probably thought that ₿$ in my formula stood for “bullshit” a couple of years ago. How can a mathematical formula be accurate in price prediction? 

I attribute this discernible growth rate to the unchanging and immutable nature of Bitcoin's predetermined schedule for issuing new coins. Newly issued Bitcoin is hard-coded to decrease by 50% every 210,000 blocks, roughly every four years. As such, price can effectively also follow a similar somewhat predictable path. With the supply set in stone, the only variable in price appreciation is demand. 

There is no doubt that the recently approved ETFs have influenced the demand side. This is the primary reason we made a new ATH prior to a halving event. However, the new all-time high of $73,757 is not a far stretch from the previous ATH of approximately $69,000. As you can see for yourself, new cycle highs usually are multiples of the previous one, and not merely 5% or 10% higher. 

On my latest edition of “The Bitcoin Minute” I take a deep dive into where Bitcoin is in its current cycle and give an estimate for where it could peak at. I will give you a hint, it is far from over and the data I cover suggests that the four-year cycles effect on price is still very much intact, just look at my formula for proof.

 

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