The Bitcoin halving is coming: Here’s what market pros predict for prices

Bitcoin’s halving is almost upon us.

The event will sap the supply of new coins hitting the market at a time when demand has soared — seemingly setting up the cryptocurrency for a massive rally.

Still, don’t hold your breath waiting for Bitcoin to hit an all-time high, according to hedge fund, crypto exchange, payment, and blockchain analyst executives.

“Price reaction is typically not immediate,” said Rikke Staer, CEO of payments solutions platform Coinify. “Major post-halving growth occurs [after] six and 18 months, and larger price movements become statistically less likely with increasing market size.”

Brian Dixon, CEO of the Off the Chain Capital hedge fund, shared that sentiment, and told DL News to expect the price to begin increasing after 12 to 18 months.

What is the halving?

The halving is a preordained event encoded into the very core of Bitcoin. It is designed to limit the supply of the cryptocurrency.

It occurs every fourth year, or, to be more precise, every 210,000 blocks being created. At the time of writing, that looks likely to happen around midnight on April 20, UK time.

The 2024 halving comes amid stubborn inflation that has seen central banks refuse to cut interest rates, and rising geopolitical tensions that threaten investor sentiment towards riskier assets like Bitcoin.

Unlike previous halvings, when new records were set after the events, this is the first time that an all-time high was reached before it.

Institutional investors

Moreover, the halving comes amid a substantial increase in institutional engagement, with new spot Bitcoin exchange-traded funds having introduced a new generation of retail investors to the asset.

Alex Cable, WEMEA area VP at blockchain analysis firm Chainalysis, noted that the percentage of Bitcoin held by institutional investors has increased after every halving event.

“Institutions have not just entered the market, they are now shaping its trajectory,” she said in an email.

Sell-offs

While there is a consensus that the price will eventually go up, market watchers are betting that the price will go down in the short term because things are different this time around.

Investors may dump Bitcoin once the halving happens, a so-called sell-the-news event, after sentiment was hit by escalation in Middle East tensions, Jag Kooner, head of derivatives at Bitfinex, told DL News.

Traders, however, are bullish that the price will rise later in the year, a K33 Research report found earlier this week.

Sebastian Sinclair is a markets correspondent for DL News. Eric Johansson is DL News’ News Editor. Have a tip? Email them at eric@dlnews.com and sebastian@dlnews.com.