Weekend column: What does the historical bitcoin price movement look like since the halving?

History does not repeat itself, but it often rhymes. So today a comparison of the historical Bitcoin price movement since the halving.

Bitcoin halving price index

The graph below shows the Bitcoin price and reward per block, divided into different epochs, each corresponding to a different reward size per block (50 BTC, 25 BTC, etc.).

The black line is the current period and you can see that it is very similar to epoch 2. This is the 2016 cycle. Additionally, the chart shows that halving events have historically caused significant price increases for Bitcoin, although the impact of each subsequent halving appears to diminish. *note epoch 1 measures the price from the moment bitcoin was launched and therefore no halving event took place there

This becomes even clearer in the graph below:

• This graph shows the Bitcoin price before and after each halving event, expressed on a logarithmic scale.
• We see four lines, each representing a halving cycle. The price is normalized to ‘1’ at the time of the halving.
• The blue line (1st halving in 2012) shows a huge price increase of 92x the price at the time of the halving.
• The red line (2nd halving in 2016) shows a price increase of 30x.
• The green line (3rd halving in 2020) has an increase of 8x.

The white line is the period we are in now and it is clear that the effect has yet to take place.

Conclusion

The charts above show that halving events have historically caused significant price increases for Bitcoin, although the impact of each subsequent halving appears to diminish. This could indicate a maturing market in which Bitcoin’s price is increasingly influenced by other economic factors beyond just changes in the block reward. However, the volatility and significant price increases around halving events still highlight the increasing level of investor interest in bitcoin.

Personally, I think the halving events coincidentally coincide with the global liquidity cycle. This largely determines how much capital flows into assets such as bitcoin. I expect that we will see significant price increases again, sometime in the next 12 months. In addition, the start of the bull market often coincides with election time and takes place again in November in the US. You can expect a lot of government spending shortly after the elections. Past performance is no guarantee for future results. Time will tell.

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Bitcoin expert Rick Hutting writes a weekly weekend column on the subject. You can sign up for his free daily online newsletter by clicking here . You can also follow him on Linkedin.