Bitcoin (CRYPTO: BTC) has raced wild in 2024, surpassing forecasts and attracting investors worldwide. The world's most valuable cryptocurrency has risen 55% since January and 320% since 2023, proving skeptics wrong again. A huge event in April could affect Bitcoin's trajectory, but it may not be enough to send it to a new all-time high. Why investors should look beyond April.
Assessing the halving role The fourth Bitcoin halving is scheduled for April 20. Bitcoin's healthy monetary policy relies on halvings every four years, which cut inflation by half.
This halving will lower cryptocurrency inflation from 1.75% to 0.8%. Long-term, the halvings could hurt Bitcoin's price. Halving its supply rate means its price must rise even if demand remains steady. Halvings have had little effect on shorter time frames.
Historical returns during halving months are low. History can reveal Bitcoin's price behavior during halving occasions. Bitcoin rose 9.5% in May 2020, its most recent halving. Bitcoin declined 7% in July 2016. Four years earlier, Bitcoin rose 12% in November 2012, its first halving.
Bitcoin's average return during halving months is 4.6%. Applying this average to current prices, it indicates a price of $72,700 by April, below the record high of over $73,000 set in mid-March.
Considering the future Though short-term swings may occur, Bitcoin's halving occurrences highlight its long-term potential. Bitcoin yields 125% over years with halvings. Better yet, Bitcoin's price has risen over 400% in the years since halving. Bitcoin usually hits a record high after halving.
Zooming out shows how lowering its inflation rate boosts its scarcity and long-term value. Bitcoin may not reach another record price soon, but halving occurrences set the stage for future success. While historical data might provide guidance, Bitcoin has often outperformed predictions. Bitcoin's volatility makes anything possible, even though the average return over halving months may not signal an April all-time high.
Instead of worrying about this month, investors should zoom out and analyze Bitcoin over years, not weeks or months. Each halving should boost the world's leading cryptocurrency as retail and institutional investors adopt it.
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