Topic: Why does the halving increase the price? (Read 429 times)

There's something special and that is what you just pointed out. When something is having the same effect whenever it happens, it means there's something special about that event. Bitcoin halving was preprogrammed from the birth of Bitcoin.

It didn't just come from anywhere but was put by satoshi himself because it's special and has great importance. Without the halving, the market wouldn't have had an identity. I don't believe there would had been a four years cycle of Bitcoin. It's the halving that's the mark of the bull market. The halving is what we look up to, the halving makes the circulation of Bitcoin coming into the market to reduce. What this means is that with the same adoption, there'll be lesser amount of Bitcoin available for trading and this increase the price of available Bitcoin.

It's simple demand and supply. There's always demand for Bitcoin so when the supply reduced (in this case just the circulating supply and not total supply) it'll make the price to go up and that's why the halving increase the price. Obviously there are other factors to contribute to this too but we're focusing on just halving for this discussion.

In recent years, the price of Bitcoin could be said to be cheaper than it is now. The low price makes it easier to buy bitcoin in larger quantities. But nowadays, even though the price of bitcoin is no longer what it used to be when it was still cheap, in my opinion, don't ever give up investing just because it's difficult to buy whole bitcoins. Because bitcoin still has a lot of potential to continue to experience price increases.

And the question is, why are more people investing their money in Bitcoin during the halving? I think the answer is because they are interested in making a profit in a bull market.

Yes, the demand usually increases before halving, because more and more people are willing to catch the train.However, the rise of the price can also be explained by "the math" essential for bitcoin. The reward for the miners becomes less, but there still have to be reasons for them to keep mining, that is why we can observe some kind of a compensation as the price is going up.

Three data points are not large but good enough to work with;
Many people have been saying about the reduction of miners reward;
Reduction of new coins entering the market;
And many more reasons why halving increases the price;
I acknowledge that the above are all reasons;
But remember that the hype and expectations that this will happen is the reason people indirectly change their behavioural attitude to make it happen!
The social media hype when the coin starts rising is another factor.

You're right. The halving is not about the Bitcoin supply being cut in half, etc. However, to avoid further misconception it's better to explain this way.
The halving is an act of creating or maintaining BTC scarcity and it's technically an act of splitting in half the miner's reward.
It's a policy created by Satoshi to counteract inflation in the market to increase demand.

Those are repeating a very common misconception.

First, the supply is not reduced by the halving. Instead, the increase in the supply is reduced. The supply increases with every block until it reaches 21 million.

Second, reducing the supply does not increase the demand. In general, supply and demand are independent functions.

The word Scarcity stands as the major trigger for the BTC price pump which is usually driven by Halving. Thus due to the market pump  more investors arise and everyone seem to be hoarding it enhancing  more scarcity moreover, the Bitcoin is getting halved , reducing the circulation of bitcoins entirely.  Therefore, there are many  a lot of reason to buy Bitcoin currently

There's nothing special about halving or specific reason why the price will increase but I think people investing in Bitcoin because when halving is done the reward in mining will be reduced in half meaning that the new BTC that is mined are not the same as before. It is now normal to invest in btc when halving is near. When you think about it where the mining reward is halved then that only means that if many people are acquiring btc then it would be very hard to accumulate since the reward is halved and the more people buy then the more they are willing to pay higher price just to obtain btc hence price increases.

Because pf.the reduction in the Bitcoin block rewards that pave the way for more scarcity and resultant into increase in the value of the commodity, so this is not only peculiar to Bitcoin alone,  but every other form of investment or asset that has a circulating supply.
Bitcoin halving is a memorable event in the Bitcoin network that paved the way for alot of scarcity and price increases even though the price of Bitcoin may not automatically increase after halven, and if there is any possible discount on Bitcoin price after halven many expert investors will buy heavily into it because they already know that in no distance time, Bitcoin price may reach and record a new all-time high which will put them in profits.

Bitcoin is a digital currency and it was not meant to be stabled or coming back to it normal position whenever the period has come but no. Bitcoin in it volatile nature was created to value ahead and not to come back periodically. And all the halving that had been occurred, this coming one is my first one to be witnessed. And when new Bitcoins will be released, it would be 4 yer interval and this yes April is the designated time for the halving. We can't predict Bitcoin halving, and there is still time so let see how the halving will be in the ine when half Bitcoin will be released to the Blockchain. And it is not a matter of premature, you have only spoken your mind.

Those who bought after the halving are those who get carried by the hypes and some people are like that, they don't invest if that commodity is not the talk of the town on how it has increased in price, this makes them to feel that is the best time for them to invest, thinking that the price will continue to pump till infinity and vefore they know it they will miss out from taking profit and run at loss the moment the bull run is over.

It is not likely, but it is certainly possible. It should definitely be some kind of "black swan" event that would crash the global market and cause disruptions all over the world.

If it is more or less business as usual, then it will very likely happen like every time before, because all those who have invested a lot of money in Bitcoin will in any case use the halving as a trigger for a new bull run. Some believe that the price of BTC will go up after the halving because miners "produce" half as much BTC as before, but even though it may have made some sense before, today's 900 BTC per day is not something that has too much impact on the market considering the amount of BTC that circulates through the markets anyway.

I think that the "bad" scenario when the halving wouldn't have positive attitude to bitcoin is rather unlikely to happen. There has to be really unfortunate news for this to happen. I more tend to suggest that the history will somehow repeat itself and we will see a new ATH after this year halving. Like we did previous times.

Actually that is happening when hype is going to happen that's why we see a lot of people got FOMO at that time since they don't want to be left behind on the event happening that's why we can assume that more buy orders really happen when halving happen plus other contributing factor is the greed feeling is high for people at that time that maybe the reason why bitcoin pump when halving.

We may not know the 100% accurate answer with this but what it shown right now that when halving came to many people discuss about positive things to happen with bitcoin that's why to many people are convince to buy and hold. But let see what will happen for this year halving since we can speculate if there's something good will happen or we will see different condition right now and bitcoin will remain like this despite of this long time event awaited by a lot of people.

I love the way you used your college experience to explain the price movement of Bitcoin, any newbie would understand perfectly if he can relate well. For some weeks now, the price of Bitcoin has been wondering about in $42, $43. And this might even be the least we may see or experience this year, it's possible. Talking about the devalue of fiat currency, that is a continuous process especially in my country, our fiat currency get worse every now and then. The only way to escape is keep some of your savings in Bitcoin network.

I don't know whether you have data to proof that people actually buys more Bitcoin after halving? From my experience and observation I think that people buys more Bitcoin before halving, because when halving is happening Bitcoin supply is cut into half, meaning that the scarcity will make price to increase. So ideally people will know that it's more profitable to buy before halving, knowing that after it that price will keep increasing till it hits ATH. So correct me if I'm wrong, because this is mainly based on my personal observation.

The price of bitcoin always depends on investor demand. After halving mining rewards reduce,  investors think less Bitcoin will be added to circulation now than in the past. Most likely, that's the reason why they jump into Bitcoin after halving instead of before halving. But this time it seems investors are also interested before halving, hence the price increasing before halving as well. We are already in the bull market and might increase more after the halving. Also, ETF rumours are playing a major role in the current bull run. If ETF gets approved, then we will see more pump on the Bitcoin chart. However, each investor has a different mindset, and they think differently, which doesn't necessarily match my thoughts. I just expressed my personal opinion.

Yeah, a total disconnection from the internet. IIRC, I've done this I think on my early days when I haven't bought yet my hardware wallet.

I've seen a lot of people talking about that low and they'll start buying. But it seems that we're not going to see it anymore and this how the progress on this market is. We see higher lows every time the cycle is in and it's your call whether you'll buy soon before the halving or you'll wait a little bit longer.

That's your money so, spend them wisely.

Let me tell you something, I remember back in the days when I was still in college and anytime they gave me an amount money for breakfast, I used to be happy because the amount can get me anything they sell in the school and I will be okay but guess what today, that same amount of money are giving to toddlers for breakfast and they will complain that is too little, it wouldn't do much for them and that is because the purchasing power of Fiat is dying every year. What you bough last 5 years for a $, you can't do that today, that applied to bitcoin, not saying we might not see bitcoin at those price again but with development coming so far in bitcoin, $40k will become a normal for people that have the means to buy and $7k might be a history.

When Bitcoin was traded around $3, many of us here didn't have the means to buy it then, many of use in 2009 would'nt look at bitcoin twice but it is because the nature and profit is appealing that is why they want it and people that have the means and want to buy are going to buy and they will sell when they have a significant profits.



Bitcoin bull run most of the time is after the halving, they don't want to be stuck when they aren't sure yet. The answer is simple, has believe that Bitcoin price grow in every four year circle and they know that miners wll anticipate for the price increased because they will most likely be operating at lost.

I cannot tell exactly why people do what they do, but i think people buy Bitcoin after the halving and when the price begins to rise, because they prefer to buy assets that are rising, so they can make profits immediately and sell. The people who buy in this way do not really believe in Bitcoin and they do not want to hodl it, but they basically just want to earn ROI in the short term.
This amount is more than enough to have an air-gapped or hardware wallet, and as for an air-gapped wallet you do not even have to spend money to get one, you can create one for yourself with some of your old devices.

I believe, it is connected to FOMO. Halving symbolises something new, some changes. It feels like there are less and less bitcoin available. And more and more people start worrying that they don't own any so far. That is because they buy. And they notice that many people around are buying as well. And the effect becomes more massive.

Bitcoin has a success rate of 100% when you consider what happens after it complete its halving cycle. Why should we doubts that the same thing would repeat itself when it hasn't failed before. The three times, isn't out of a bigger number of attempts that you can say it doesn't have a 100% success rate. All the halving results were the same effect but just that they had different timeframe but the main point is that the price changed significantly after the halving has been completed.. Bitcoin has had all its previous halving boost its price without leaving any year untouched.

This is a pre programmed mechanism so I don't get it when people are doubting that the price will also increase this time around. The signs are already there, it isn't just because of the halving been completed that makes the price of Bitcoin to increase, there are other factors but the completion of the halving puts other factors into motion.


Naturally we tend to follow trends as humans, fomo kicks in when the price of asset begin to increase as people try to catch the train before it leaves them behind. When Bitcoin starts increasing different sets of people with different beliefs begin to take action. We have those that didn't believe the price will increase so when it begins to happen the fomo into the market. We also have those that didn't have full convictions and only bought a small portion of Bitcoin so as the see the market moving, they buy more. Basically people won't want to miss out so they'll buy more as they begin to see the price of Bitcoin increasing with all the positive sentiments surrounding Bitcoin. To be at a better position, it's better you buy when the fomo hasn't kicked in and that's by accumulating before the halving is completed.

I have been seeing people talking about the Bitcoin halving while so many do not have sufficient understanding about what it really entails. Even though we might not have experienced what halving Actually means and what it entails. We need to understand one thing which is bull run. Halving is a time when the price of Bitcoin which normally triggers the price of altcoins to go bullish. We can make good profits from halving if we know what we are doing and the best way to do that is to keep buying and holding for when the actually time will comes.
 

When in doubt, DCA is your friend to safely enter on Bitcoin without thinking too much about lower price since you will purchase in average price. It’s normal to become cautious and play safe if you knew that the price can slide down any moment but you can’t deny the fact that price can go upward continuously without giving opportunity to enter on mich lower price.

You should buy in small fraction on different time frame if you want to accumulate without worrying much if the price will dump or pump.

Many would have thought like you but to be honest, this type of thought never came to my mind when I learned about bitcoin. It is so transparent and so true that bitcoin will still follow the same pattern as it has done previously. No too many people will keep investing in a project that is not worthwhile to be invested in, someone must have seen the loophole or something that would not make anyone invest in it if there’s any one. Bitcoin price will continue to increase and surpass previous all time high after every halving, that is just an event that will continue in that manner.


Because before the halving is the time you will get to buy bitcoin at a lower price. In past events, you will only see an uprise in price after every halving and everyone believes it will still follow the same pattern even in the upcoming halving.

This can be determined on when each everyone of us made the decision on joining the bitcoin network and adopted it use for an investment, some never have that kind of knowledge of making an investment with the purpose of targeting the halving because some years back, many were only having little about the bitcoin knowledge.


Because after halving there comes bullrun and the bitcoin market price rises to a new all time high till it achieved the maximum it could.

I will not call it premature but a good thought because many of us who are not into crypto or are just starting there journey had this same thought that should we accept the old patterns as an indicator for future predictions as you said 3 times might not be enough and to be honest I also had the same thoughts when I was newbie but the number of halving was not 3 at that time.

And buying 1 btc back in time was easier than now.
Smart people invest before having and less smart people invest after halving and not smart people don't invest in BTC at all.

The 2024 halving wouldn’t instantly affect a price after it, but a close to a year after it there would be an increase in price of bitcoin. This has been the trend in the past three halving and I don’t see that changing even though the past bull run increases the price with high percentage, l think this one will not be too high since the volatility rate seems to be reducing. It is not only ETF approval that will incite a bull run Infact the ETF approval will just be like a FOMO causing a mini bull run and nothing much.


Been recognized as an official means of payment means that bitcoin is treated as legal tender, which is wrong. ETF approval doesn’t guarantee that bitcoin will officially become a legal tender, both are two different things. ETF will just drive more adoption although to me it will give government more power towards their quest to censor or centralize the bitcoin.

You’re not out of place to have made these observations and that it happens plus, we today see it for a pattern and bank on that to be the case through every other occurrence.

Well, we could blame this on the psychology of human behavior. Most times, it’s about what we already know, coming to push us towards same repetition over again due to an already established expectation thereby, creating the event (Bulls/Bears).

The halving is already a certainty, something that is independent of efforts but what comes after is based on our response to it.
The halving creates an idea of scarcity due to the reduction of block reward to miners. This in turn reduces the introduction of new Bitcoins into the market, mounts pressure on available Bitcoins in circulation, creates reasons why there should be more hodlers and as well, goes about to advertise for more patronage. It’s become a significant event in the history of cryptocurrency, field with expectation and people now bank on this for high returns.

 
No one knows the future, and at that time, BTC was not as famous as now. Forget about the past, think about the future. BTC is still a valuable band; maybe someone will say in the future that 0.3 BTC is realistic in 2023.
 
 
The answer is so simple. People choose to invest in the BTC market post-halving due to a reduction in its supply, which will increase demand, and you know that when supply becomes low and people demand anything high, it increases price pressure. Such types of events are a strategy in which investors look to invest based on historical performance.

How many people have $40 000 they can miss? I'd say 0.01%

I personally had about 70k in savings and spent 13k on 0.3 BTC. I was interested the whole year, but I was chasing the 10k low that we never hit.
I'm in doubt, whether I should buy 0.2 more or there will be a better opportunity.

I know that. But if the price keeps increasing after the halving it must be because many people are buying after the halving, or not?
It's hard for me to expect a strong price increase after the 2024 halving, while everybody knows they should be buying long before the halving.
The only argument I still see for strong price increase, is ETF approval leading to BTC being recognized as an official means of payment.

People invest massive and more after bull run. If people are not investing after bull run, the price of bitcoin will not increase. The bulls means that their are more people that are buying.

Yes an old computer is good in a way that you will remove the wifi and bluetooth modules. Sparrow can also be used, it is a good bitcoin wallet.

It's still realistic and the same questions will rise again when we're gone far and the prices are too much already.

That is because they like more confirmation that the price have already increased than to wait patiently before it goes up. We're humans and only a few believes on what we're telling to buy now and wait until the price goes up, that's their approach and strategy that's so wrong but we can't blame them.

An old desktop or laptop if you have will be enough. The important thing is to download the official wallet of Electrum from its official website because too many clones and fake out there.

It was easier to buy 1 BTC in past years, past 3 halvings, but it was harder to hold those bitcoins years ago. Because bitcoin was not too valuable years ago and people were less seriously about holding their bitcoins.

Now, you have more difficulty to accumulate 1 BTC but you will have more reasons to hold your bitcoins.

On chain stats shows that more holders have been accumulating bitcoin in last few years.
Greater than 0.1 BTC https://www.lookintobitcoin.com/charts/addresses-greater-than-0-1-btc/
Greater than 1 BTC https://www.lookintobitcoin.com/charts/addresses-greater-than-1-btc/

You even can have an air gapped wallet, free. You can use Bitcoin Core, Electrum wallet softwares and create it offline on an air gapped device. Then you will have an air gapped wallet.

[Guide] Secure air-gapped crypto wallet storage method

You're right, three data points aren't a large enough sample to definitively claim a pattern but remember that the halving happens every 4 years, so I think you can take that into consideration. It reduces the rate of new coins entering circulation potentially leading to price increase. Some investors may prefer to wait for confirmation of the impact before committing. Others might see the potential for higher returns after the event. Individual investors are the key players before and now it’s the institutional adoption for the major price appreciation.

Airgapped Wallet can be any old device like an old laptop or PC you own at home.  I tested Airgapped Wallets on some sub 30 dollar PCs and they work decent enough to be usable still.

It is currently considered a 'pattern' because it repeated three times already.  It will be considered more of a pattern the more times it will repeat itself.  Trading Analysis has patterns too but it does not mean there are exceptions however.

Why do you think people 'put more money' for its price to have an increase?  The only 'more money' they pour into Bitcoin is the money of silly people who buy Bitcoin on the Bull Run hoping they did not miss the train and will make a ton of money.  They always end up being the losers.

Bitcoins price increases due to the halving.  It becomes twice as hard to mine so in consequence in my logic it should be at least twice as pricey.  There can always be exceptions again too.  Anyway.  This is just the price we all agree on paying for a Bitcoin.  If there was not enough demand there would be a smaller price for sure.

Bitcoin price is purely determined by a combination supply and demand, and no one really understands them. Is the price growing because supply is decreasing or because demand is rising? We can't answer even such simple question, because we don't have the strong data.

One of my theories is that these cycles are a kind of self-fulfilling prophecy. People look at the past pattern, assume that it will repeat and act accordingly. If the price rises before the halvening, speculators think it's a premature rally and dump their coins, causing a correction.

If you know the historical price of Bitcoin you should notice the price ranges are different every block halving because like others said the block reward for miners drops into half every 4 years.

Actually, for me that's not a good idea to invest in Bitcoin after block halving you should buy Bitcoins before block halving because if not you might be late if the price increases much before and after block halving.



I don't think you still need to buy an Airgap or hardware wallet if you already have an old PC and phone it should be enough. You can make your old PC as offline cold storage and only use it to store your private keys and sign a transaction and never connect it to the internet and install your watch-only wallet into your phone where you can monitor your wallet and make unsign transactions.

It is only when an event repeats 2 times that we say it is an accident, but if any event repeats 3 times, then we can say that this is a pattern. And if after each of the three past halving, the supply of new coins was halved and at the same time the price increased, then we can assume that after halving in 2024 we will see similar consequences.

When a thing happen once it is called luck but the third time isn’t luck. The reason why you see an increase in bitcoin price after halving is because the amount to be mined reduces and as such the supply becomes limited. When the supply of a product decreases and the demand is high it increases the price according to law of demand and supply


People actually invest more into bitcoin before halving because after halving that is actually when the price is low because after halving there is bull run.


There is not amount that is too small to be secured, although hardware wallets is a bit expensive I will say for that amount of bitcoin it is affordable for you to buy. There are good hardware wallets still within the price of $100-$200. This ember months are mostly filled with black market sales, you actually get one at a reduce amount

At 15k I kept hearing we would get to 10k this year.
It seems to me that creating fomo by constantly advertising that the price will skyrocket after the supposed ETF approval, is big business.
It's just very hard for me to believe that anybody with serious interest in BTC would get involved after the halving.

The only thing I see that can really bump up the price, is large institutional money. Individuals keep telling me that it is too late to get into BTC because the price has already gone too high.

The smart ones buy when it's still the bear market, like when BTC was at $15K. The newbies and FOMO brigade will jump in later when Bitcoin crosses the previous all-time high and starts appearing more on main stream media. That's what I observed in the last 2 bull runs

You could create your own airgapped wallet using a clean device that never accesses the internet.

Well at the first time of the halving there was no precedent, no anticipation. Neither was this the case during the second halving.
BTC investors could only vaguely see a pattern when the 3rd cycle arrived.

Meanwhile the whole world is anticipating on the 4th cycle. The attention was never so big in previous cycles because the price was not as significant as it is today. Everyone expects the price to go up loads after the halving. But why? It makes sense that everyone who ever heard about BTC, buys before the halving and not after.

We're also at a stage now where buying 1 BTC is not an option for 99.9% of society. People would have to buy per 0.1 BTC.
I think that the price of BTC went 10x on all previous occasions because individual investors wanted BTC, and were able to afford it. I think that the price can only explode from here if large institutions pump big money into BTC.

Investing after halving massively is something that is becoming norm and no special reason. But I think what makes people to start it is because after halving, the mining reward decrease by half which makes the supplying of bitcoin into the market to reduce, making it deflationary and valuables.

A few random beginner questions:

- There have been 3 halvings, and in all of them the BTC price was insignificant compared to what it is today. Am I the only one who thinks that it is premature to speak of a pattern when something only happened 3 times before, and in completely different price ranges? Buying 1 BTC was realistic for many people before the first 3 halvings. Now that is no longer the case.

- Why would people invest loads of money in BTC after the halving and not before?

- What is a good price range for an air gapped wallet, for someone who only manages 0.3 BTC?
I take security very seriously. I'm in doubt between coldcard and Ngrave. Both are not very cheap. Ngrave will be over 500 bucks, which I think is a lot for someone who only manages a 13k portfolio. On the other hand, the value may increase and I want to take 0 risks losing my portfolio