How halving affects the price

Halving, which every four years reduces the reward to miners for a block found, affects not only the supply of BTC, but also its price. Understanding what halving is, why it's important, and what happens to bitcoin after halving helps traders adapt strategies and make informed decisions. About this and much more, we covered in detail in Part 1.

Usually, the bitcoin price tends to rise after halving. The reason is a decrease in issuance: the market receives fewer new coins, while demand may remain the same or grow. This creates a shortage and stimulates the price to rise. However, it is important to remember that the market lays down expectations in advance, and sometimes the rise begins long before the event.

Halving and volatility

Every bitcoin halving is accompanied by increased volatility. Investors, traders, and many opinion leaders begin speculating in advance about how much bitcoin will be worth after the halving, which increases trading activity and leads to sharp price movements. This volatility can occur both before and after the event and is not always accompanied by immediate growth.

Historically, bitcoin halving 2016 and bitcoin halving 2020 have shown a similar pattern: after short-term turbulence, the price of BTC stabilized and moved into a steady rise. Bitcoin halving 2024 caused a similar effect and bitcoin set a new all-time high. Everything depends on the macroeconomic background, investor sentiment and global interest in cryptocurrencies.

Trading strategies against the backdrop of bitcoin halving

Understanding when bitcoin halving, how many days to halving and the exact date of bitcoin halving allow traders to prepare. A bitcoin halving timer or bitcoin halving counter can be used for this purpose. Once the countdown approaches zero, many traders turn to aggressive trading by opening long positions and waiting for growth.

There are strategies based on buying several months before the event followed by profit taking in the first weeks after the halving. Others focus on long-term holding, waiting for a repeat of the trend that the bitcoin price has shown after the halving in past periods. But even with patterns, there is no 100% guarantee of results.

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Halving of other cryptocurrencies

In addition to BTC, the halving mechanism is also used in other cryptocurrencies. For example, Litecoin halving occurs every 840,000 blocks. The last halving of Lightcoin was also accompanied by a surge of interest in the asset. However, the effect of reduced issuance may be less pronounced compared to bitcoin, as liquidity and demand for altcoins is lower.

There are also events like halving bitcoin cache, halving etc and halving etherium. Although Ethereum does not officially use the halving model, the switch to PoS (Proof-of-Stake) has also reduced the issuance of new coins, causing similar market expectations.

Risks and myths about halving

Many myths have developed around the concept of halving over the years, and many of them can be misleading to traders and investors. One of the most common misconceptions is the belief that the bitcoin price is supposedly bound to rise after halving. This opinion is based on historical data, because previous halving was indeed accompanied by subsequent rallies. However, it is important to realize that the past does not guarantee a repeat of the scenario in the future.

Another myth is the notion that the countdown to halving is the beginning of a “golden age” for all cryptocurrency holders. In reality, bitcoin halving can cause both a rise and fall in the value of the asset. This is why many traders react too emotionally to the news of how much is left before bitcoin halving, without considering the current market structure. Exaggerated expectations arise, and when they are not met, panic and loss taking begins. This is especially dangerous for those who are not skillful at risk management and enter the market at the peak of hype or fomo.

Also, there is a myth that when bitcoin halving happens, it will automatically affect the entire crypto economy. But we should not forget that not all altcoins depend on the halving mechanism.

Special attention should be paid to timing: while the bitcoin halving timer is running and participants count the days until the halving, a lot of speculative predictions are poured into the market, such as “how much will bitcoin be worth after the halving”, “what will happen to bitcoin after the halving”, or “bitcoin halving growth chart”. However, no analyst can predict the future accurately and to the smallest detail. Relying only on the reverse bitcoin halving bitcoin counter is risking your money, especially if you enter the market without understanding the full picture.

Another myth is related to the fact that halving as if automatically increases the scarcity of the asset. Yes, issuance goes down, but that doesn't make bitcoin scarce immediately. Most of the coins have already been mined, and price movement depends on liquidity, supply and demand in the spot and derivatives markets. Therefore, blind trust in the Stock-to-Flow model can be dangerous - it is good at explaining historical trends, but cannot account for sudden changes in regulation or changing institutional behavior.

Network overheating and a drop in hash rate after bitcoin's halving date is also considered a serious risk. Mainers receiving half the reward could shut down their equipment if the price does not increase proportionately. This will reduce network security and may trigger temporary outages. This is especially important in the first few months after an event, when the network is adapting to new conditions. Such periods have already been observed in the history of bitcoin halving, and participants should be prepared for technical volatility.

To mitigate risks, it is important not only to keep an eye on when bitcoin halving will occur, but also to approach the event with a comprehensive strategy. Investors should soberly evaluate expectations, consider potential pullbacks, manage capital and not build a portfolio solely around the idea of a halving. It is also worth considering that when the next bitcoin halving occurs, the market may be in a completely different environment and previous patterns of behavior will no longer work.

FAQ about halving

1. What is halving?

Halving is a scheduled reduction in the reward to miners for a block on the Bitcoin network. It occurs approximately every 4 years.

2. When is bitcoin halving?

The next bitcoin halving is expected in 2028, the exact date of bitcoin halving depends on the block generation rate.

3. How long until bitcoin halving?

To find out how long is left until bitcoin halving, you can use the bitcoin halving timer or the bitcoin halving counter online.

4. How much will bitcoin be worth after halving bitcoin?

Predicting how much bitcoin will be worth after halving is difficult. Historically, the price has risen, but there is no guarantee that this will happen again.

5. When has there been a bitcoin halving in the past?

Bitcoin halving 2016, 2020, and 2024 have been successful and followed by subsequent price increases. However, each cycle is unique.