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Bitcoin’s Mixed Post-Halving Performance: Analyzing Historical Trends

2023.12.26

 

Key Takeaways

  • Historical data shows mixed Bitcoin performance post-halving, with varied returns.
  • 2024 presents potential catalysts for Bitcoin, including a U.S. Bitcoin ETF and interest rate changes.

Analyzing Bitcoin’s Post-Halving Performance

Historical data reveals that Bitcoin’s performance post-halving has been inconsistent. In the short term following halvings. In the two months following historical halvings, Bitcoin has shown an average return of around 16%, which is modest compared to its usual volatility. Notably, after the first halving in 2012, Bitcoin surged by nearly 45%, while it saw a 5.5% decline after the 2016 halving.

Bitcoin vs. Ethereum and Litecoin

Research indicates that Bitcoin’s post-halving performance has been underwhelming compared to Ethereum. Similarly, Litecoin, another cryptocurrency with halving events, has shown either parallel trends or significant underperformance following its halvings. This suggests that a decrease in supply doesn’t inherently increase prices, as demand remains a variable factor.

Potential Catalysts in 2024

Looking ahead to 2024, several factors could positively impact Bitcoin’s post-halving scenario. The potential approval of a Bitcoin spot exchange-traded fund (ETF) in the U.S. could boost demand. Historical precedents like BlackRock’s steps towards an ether ETF have positively influenced prices. Moreover, a decrease in the global interest rate could favor Bitcoin, similar to gold. The Federal Reserve’s indication of possible rate cuts in 2024 adds to this optimism.

The U.S. Presidential Election’s Impact

The upcoming U.S. presidential election could also be a significant catalyst. The likelihood of introducing new regulations during this period is low, which might lead to another bullish event for Bitcoin post-halving in 2024.

Citi’s Cautionary Note

Citi analysts, led by Alex Saunders, emphasize that their research is informational and doesn’t predict the future of cryptocurrencies. They highlight that past trends in halving events don’t necessarily guarantee future outcomes, especially in the volatile crypto market.

 


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