Why Bitcoin halving remains an important factor for BTC prices

  • Bitcoin may repeat a pattern similar to the 2012, 2016, and 2020 halvings.
  • All eyes would be on the Bitcoin ETF outcome in Q4.

For the past few months, a lot of Bitcoin [BTC] holders considered the decision on the ETF applications as the possible catalyst that could shoot the king coin to parabolic price levels. However, that has not been the situation. This is because the regulators involved have chosen to delay the applications until they deem fit.

Read Bitcoin’s [BTC] Price Prediction 2023-2024

Despite that, BTC’s Year-To-Date (YTD) performance has remained at an impressive 63.3% increase. Bitcoin strategy fund New York Digital Investment Group (NYDIG), in its Q3 review of the market, considered the performance as great, especially as Bitcoin outperformed every other asset class. 

The scenario won’t change

As AMBCrypto reported earlier, the coin’s 11% decrease in Q3 was a bit disappointing. NYDIG, however, said it was not surprising because there were rising concerns about the economic downturn and rising interest rates.

Regardless of the current events, the asset management company noted that next year’s Bitcoin halving is still the major facet that could influence BTC’s price action.

Bitcoin price during halvings

Source: NYDIG

By April 2024, the halving will bring down the block reward from 6.25 BTC to 3.125 BTC at exactly 840,000 block. According to NYDIG, the halving remains a significant factor from an economic perspective, noting that,

“By repeatedly halving the supply function, Bitcoin will eventually reach a point in 2140 where it can no longer be divided in half. This will effectively halt the growth in the number of bitcoins, an important part of Bitcoin’s “controlled supply” function.”

The ETF is also important

Price-wise, the firm also mentioned that that having would continue the pattern registered in previous cycles. For example, after the 2016 halving, BTC rose from 1,700 to over 15,000 months later.

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The scenario wasn’t exactly different in 2012 and 2020 also. NYDIG also mentioned how the November 2021 drawdown was similar to the experience of the 2018-2019 cycle. 

Bitcoin performance in major cycles

Source: NYDIG

The report further added that the 2023 was already showing signs of the rebound that happened in in 2019. NYDIG explained that,

“While 2023 looks a lot like 2019, it hasn’t experienced such a significant retracement. Nevertheless, it is important to emphasize the repetitive cyclical nature because Bitcoin appears to follow the path set by the previous two cycles.”

Nonetheless, NYDIG noted that its insistence on halving as a catalyst does not negate the influence the Bitcoin ETF approval may have. 

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It also mentioned that the litigation between Grayscale and the SEC, as well as the final decision on the ETF applications, could either make or mar BTC. The report read,

“As we head into the fourth quarter, all eyes are focused on legal proceedings and the industry’s concerted efforts to gain approval for spot bitcoin trading in the US.”

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