April is a major crypto month. Bitcoin (CRYPTO: BTC) may rise this month after the next halving event. How much higher could Bitcoin go this year after hitting fresh highs earlier? I'll discuss its performance after prior halvings and what investors should expect.
After prior halvings, investors made large gains. In a halving event, Bitcoin miners get half the rewards. To manage Bitcoin supply and ensure scarcity, the overall supply cannot exceed 21 million. Scarcity keeps digital coins precious. Every four years, Bitcoin will be halved; it happened in 2020, 2016, and 2012. Bitcoin prices following previous halving events are seen below.
The next Bitcoin halving is expected on April 20. Since the cryptocurrency has performed well in the past, it may climb again. The question is how much return investors can expect. The cryptocurrency's returns after 300 days in prior halving events suggest it might rise, but context is crucial.
Bitcoin's low valuation in 2012 helped it rise. The first halving occurrence highlighted the emerging digital money. Initial 2016 returns were disappointing. Back then, Bitcoin cost a fraction of what it does now.
Meme stocks and risky investments rose in 2020 as COVID-19 relief measures injected money into the economy. Many people invested their assets in equities and crypto, raising valuations. After the markets cooled in 2022, Bitcoin collapsed.
Bitcoin is reaching record highs heading into the halving event. The stock market is also at record highs. Bitcoin may have too much optimism and investors may not see similar profits after a halving occurrence. Given Bitcoin's high valuation and volatile markets this year, investors should limit their expectations, even though history suggests the cryptocurrency could double. Context is crucial.
Halving may seem like a certain way to boost Bitcoin's price, but it shouldn't. The cryptocurrency's value should already reflect investors' knowledge of its impending arrival. COVID relief money in 2020 and 2021 provided investors additional money to invest in cryptocurrency, which was significantly cheaper then. Nowadays, finances are tighter and economic conditions are poor.
After the halving event later this month, Bitcoin's price may rise, but investors shouldn't believe it will double again this year. Bitcoin is still a hazardous asset, so only invest if you're comfortable with the risk and uncertainty. Buying cryptocurrencies before the next halving event does not guarantee high returns.
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