Bitcoin (CRYPTO: BTC) reached a record $73,500 on March 13. After a severe crypto winter in 2022 that saw its price plunge more than 65%, the recovery was striking for those who saw it drop from its all-time high to $16,000.
But this new high goes beyond morale. First time Bitcoin reached all-time high before halving. A few additional factors suggest it's a portent of things to come.
A halving event is built into cryptocurrency programming. The cryptocurrency's strong monetary policy is supported by the halving every 210,000 blocks (or four years). Bitcoin supply growth halves with each halving. This will continue until 2140, when the last Bitcoin is mined.
Halving has obvious implications. A decrease in supply means prices must rise even if demand remains unchanged. But the halving's historical influence is greatest afterward. Bitcoin has never reached a new high before halving until this year. That's why its recent rise to $73,000 is unusual.
Bitcoin often rises after halving. The price rises 125% in those years as the market anticipates the supply drop. On its current trajectory, it is on track to return more than 200% this year, demonstrating how this halving cycle is different from others. There are likely multiple reasons Bitcoin is ahead of schedule. Supply and demand may be the most obvious and influential.
Currently, supply is at 2018 levels. The first halving with fewer bitcoins will occur with 2.2 million coins on cryptocurrency markets. The near-record number of holders who refuse to sell their coins may be reducing supplies. Before its latest step up, long-term holders owned 75% of the supply.
With tenacious holders causing a historic scarcity, spot Bitcoin ETFs in January made matters worse. ETF providers accumulated massively to suit investor demand. Demand has decreased in recent weeks, but the 11 spot Bitcoin ETFs were buying 14 times the crypto's daily supply (900 coins). Add everything all and we have the ultimate price-raising recipe.
Looking forward to post-halving As impressive as this year is, history shows that post-halving years have the best stretches. As the market competed for fewer bitcoins, the price surged by about 400% in the year after a halving. Present conditions suggest that 2025 will continue a similar route to post-halving years. Bitcoin's new home on Wall Street gives deep-pocketed institutions access, unlike previous halvings.
With supply already at record lows, another halving that lowers supply growth below 1% might propel crypto to new highs. It is difficult to predict how high it will go during this halving cycle, but 2025 may be considerably more explosive than past post-halving years. Bitcoin, the world's most valued cryptocurrency, has a huge potential at $71,000. With adoption rising and Wall Street's greatest names arriving, the best days may be ahead. See you after halving.
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