Bitcoin halving tends to spur periods of excitement and opportunity for investors.
The meaning of half supply is key to Bitcoin being a good investment.
It’s great to see your portfolio gain value.
It’s been over a year since Bitcoin’s (Cryptography: BTC) The last half that occurred on April 20, 2024. The next half is not estimated to occur until mid-April 2028.
But I’m already looking forward to it for at least three reasons and I’m already preparing it. You might want to do the same thing.
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If you are a long-term investor and a long-term holder of Bitcoin, all half are strengthening the supply dynamics that make the coin scarce. In other words, halving must occur to ensure that asset prices continue to rise, assuming there is a consistent level of demand.
Halving is named after the fact that, on average, every four years, the reward miners get to mine a block of Bitcoin is reduced by half. Therefore, these miners have little new supply to sell to the market to provide liquid Fiat currency that needs to fund capital expenditures and operations. This means that buyers must compete more harder for the coins offered and increase the price.
Half of this contributes to rarity, but does not guarantee a price increase. The point is that when you cut halves, the same buyer pool can promote higher prices than before. There is no need for a major influx of new interest in Bitcoin. And as a holder and a consistent buyer, this is all something to look forward to.
Even if you plan on holding a coin forever, like I do, it’s fun when the price goes up. And half of it has a known effect on prices, but that’s not what the previous section makes you think.
The exact day of the half is unknown in advance as it occurs every time it is mined every 210,000 blocks of Bitcoin. However, it is possible to formulate a reasonably close estimate of harving dates based on how quickly each block is mined. This is automatically adjusted every two weeks to maintain mining time for each block of about 10 minutes. A wise investor knows that there is no need to predict a given catalyst day. You can purchase the assets in advance and enjoy the results every time the catalyst is generated.
The story continues
And that tends to happen with Bitcoin. Usually there is a price increase 12-18 months before Harving is estimated to occur as a sophisticated actor as the forefront of the event. Look at this chart:
Bitcoin price data by YCHARTS
Before the last half, consider the halving occurred in May 2020 and July 2016.
I have a long-standing strategy of accumulating Bitcoin at a slower pace, regardless of price, but the more active buying season for the next half preparation is just a year and a half away. Prices will likely rise in the meantime. And the period of opportunity is exciting, to say the least.
Historically, the Alt season tends to occur 12-18 months after Bitcoin halving. The term “alt seans” refers to the period when many Altcoins see the wild rise at pricing. If you have Altcoins, they’re interesting if you basically have all the ciphers other than Bitcoin. Because it’s time to see if the market thinks your investment decision is smart or if you think it’s a dream. It is also the best opportunity for most investors to end their investments in Altcoins, made with favorable entry points when prices are on the bottom of the rock.
The reason Alt Seasons tends to match the post-Halving period is because the newly concentrated Bitcoin holders are fresh from the highs of the coin after halfway through, taking some of the prize money and investing in risky plays in smaller cryptocurrencies that could run far away. Whether this rationale is trying to keep the truth is hard to tell, but the timing of past Alt seasons is perfect for the story.
Alt Seasons is when the market decides which coins and tokens are valuable and which are just hot, so it tends to decide which projects survive, become a permanent part of the crypto ecosystem, and which projects fade. While there is no guarantee of coins that lasts for a long time just because prices exploded during the ALT season, Crypto’s best teams tend to grab the moment by using the coin’s growth revenue to fund the next step in their strategic planning.
Halving therefore tends to provide investors with the opportunity to find an altcoin that will become the most powerful investment.
Consider this before purchasing inventory with Bitcoin.
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Alex Carchidi has a Bitcoin position. Motley Fool has a position and recommends Bitcoin. Motley Fools have a disclosure policy.
3 reasons why I’m still looking forward to the next half of Bitcoin
