147 Days After the Bitcoin Halving: Where Do We Stand Now?

147 Days Since the Last Bitcoin Halving

The last Bitcoin halving occurred 147 days ago, an event that has historically had a profound impact on the crypto market. Every four years, Bitcoin undergoes a halving event, reducing the rate at which new Bitcoins are created through mining. This mechanism, embedded in Bitcoin’s protocol, is designed to gradually reduce inflation and serve as a deflationary safeguard—one of Bitcoin’s greatest strengths according to many.

The Historical Impact of Halvings

Comment from Virtune: Looking back at previous halving cycles, they have almost always been associated with significant price increases in Bitcoin. Following the halvings in 2012, 2016, and 2020, explosive price surges occurred. The underlying reason for these price increases is simple: while demand for Bitcoin continues to grow, the supply of new Bitcoins decreases, creating a market imbalance. This often leads to price increases as supply becomes scarcer relative to demand.

The Psychological Factor

Beyond the technical impact on supply, Virtune highlights the important psychological role halvings play. Bitcoin investors’ expectations are often driven by the belief in future value increases, and the halving cycle reinforces this narrative. Each halving serves as a reminder of Bitcoin’s deflationary nature, often triggering increased speculation that prices will rise.

A "Risk-Off" Climate, but the Pattern Holds

Despite a global “risk-off” sentiment in August, driven by economic uncertainty and rising interest rates, Bitcoin is following its historical pattern. After each halving, there is typically a period of consolidation followed by an upswing. Several analysis firms, including Standard Chartered, now predict a new price increase in 2024 and 2025, in line with previous cycles.

Known for its volatility, Bitcoin has shown strong resilience to global economic trends. This is partly because it is viewed as a hedge against inflation and an alternative to traditional financial systems. While short-term price declines may unsettle some investors, the long-term trend tends to be positive after halvings.

Institutional Adoption – A Game-Changer?

One of the most interesting aspects of the current cycle is the increased institutional adoption of Bitcoin. In recent years, more institutional investors, such as major funds and corporations, have begun to see Bitcoin as a legitimate asset to include in their portfolios. This adoption strengthens confidence in a more stable and long-term price increase. Virtune also aims to achieve this in the Nordic region with its regulated ETPs.

What Can We Expect?

The outlook for Bitcoin is optimistic. The reduced supply following the halving, combined with strong demand and institutional interest, sets the stage for a potential price increase in 2024 and 2025. Despite short-term fluctuations, Bitcoin follows a clear pattern that has historically proven profitable for long-term investors.

Investors have the option to invest in a fully Bitcoin-backed ETP through the Swedish company Virtune, whose products are listed on among others Nasdaq Stockholm. These can be traded via several brokers such as Avanza and Nordnet.

Learn more about Virtune’s Bitcoin ETP here.

Crypto investments involve high risk. Virtune does not provide investment advice. Investments are made at your own risk. Securities can increase or decrease in value, and there is no guarantee of recovering invested capital. Read the prospectus, KID, and terms at www.virtune.com.