2 Min WatchArticle20 Mar 2024

What the Upcoming Halving Might Mean for Bitcoin Prices

By Erik Norland

At a Glance

Bitcoin prices rallied after each of the past three halvings, with prices rising by 559% after the most recent halving in 2020

Despite slowing growth in the bitcoin user network, the recent approval of bitcoin ETFs and the upcoming halving may give bitcoin a lift

Could the upcoming bitcoin halving drive bitcoin prices to new all-time highs, or is bitcoin headed for another bear market?

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On April 19, something is expected to happen to bitcoin that has only occurred three times previously: a halving. During bitcoin’s first four years, roughly 2.7 million bitcoins were created each year. Then, on November 28, 2012, the first halving occurred. For the next four years, the number of new bitcoins dropped to around 1.5 million.

The second halving occurred on July 9, 2016, which dropped annual minting of new bitcoin to around 680,000. The most recent halving happened on May 11, 2020. Since that time, the number of new bitcoins further slowed to around 330,000 per year.

Market Rallied After Past Halvings

The three previous halvings were followed by rallies in bitcoin prices. In the 365 calendar days after the 2012 halving, bitcoin prices soared 8447%. In the 365 days following the 2016 halving, bitcoin prices rose by 290%. In the 365 days after the 2020 halving, bitcoin prices rose by 559%. However, even within the rallies, bitcoin prices remained volatile and experienced corrections of 20%-35% or more.

Bitcoin Growth Steadies

There is no guarantee that bitcoin will rally in response to its upcoming halving. Over time, bitcoin has been losing upward momentum as growth in its user network has slowed. In the beginning, the number of transactions per day was growing exponentially but that growth slowed after 2016.

However, recent interest in bitcoin ETFs has pushed up transaction volumes which might, along with the upcoming halving, give bitcoin yet another lift.

About the author

Erik Norland, Managing Director & Chief Economist, CME Group

is responsible for generating economic analysis on global financial markets by identifying emerging trends, evaluating economic factors and forecasting their potential impact on CME Group's various asset classes, ranging from interest rate products to energy and agriculture. He is also one of CME Group’s spokespeople on global economic, financial and geopolitical developments.

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