Bitcoin has had its strongest first half of a year since 2019, with its price nearly doubling since the start of 2023.
The world’s leading cryptocurrency reached above $31,000 this week, up from $16,000 in January. This pushed its market capitalization above $600 million for the first time in more than a year.
Some crypto analysts believe that the approaching “halving” event, which will see bitcoin mining rewards drop by 50%, could be one factor behind the cryptocurrency’s positive price trend.
Bitcoin’s halving is a recurring event that occurs roughly every four years. This event reduces the reward that miners receive for processing transactions, which in turn reduces the supply of new bitcoins entering the market.
Many traders and investors believe that the halving has a significant impact on Bitcoin’s price. In the past, the halving has been followed by a period of price appreciation. This is because the halving makes Bitcoin more scarce, which can lead to an increase in demand.
The halving is a built-in feature of Bitcoin’s code. It is designed to make Bitcoin a deflationary asset, meaning that its supply will eventually become limited. This is in contrast to fiat currencies, which are typically inflationary.
“Riot Platforms, an industry leader in bitcoin mining and data center hosting, announced a $162 million investment to purchase 33,280 miners, aiming to nearly double its computational power in anticipation of the next halving.”
Bitcoin’s halving is scheduled to occur on April 26, 2024.
Pseudonymous crypto trader PlanB has noted that a historic price trend suggests that Bitcoin’s price could continue to rise in the coming months.
PlanB tweeted on Monday that a trading strategy of “buying Bitcoin six months before a halving and selling 18 months after a halving” has historically outperformed the “buy and hold” strategy.
The halving is a recurring event that occurs roughly every four years. It reduces the reward that miners receive for processing transactions, which in turn reduces the supply of new bitcoins entering the market.
Many traders and investors believe that the halving has a significant impact on Bitcoin’s price. In the past, the halving has been followed by a period of price appreciation. This is because the halving makes Bitcoin more scarce, which can lead to an increase in demand.
Plan B’s tweet suggests that the halving could be a good time to buy Bitcoin. However, it is important to note that past performance is not always indicative of future results.
“The next halving is in April 2024… Will this strategy work again?”
