Bitcoin Suddenly Braced For A $35 Trillion Halving Price Earthquake

04/20 update below. This post was originally published on April 19

Bitcoin BTC BTC is just hours away from its next supply cut, known as the bitcoin halving, amid fears of a "rapid, cataclysmic" U.S. dollar collapse.

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The bitcoin price, up around 330% since crashing to recent lows of $15,000 per bitcoin in late 2022, has struggled in recent weeks despite climbing expectations China could be about to blow up the bitcoin price.

Now, as Binance's bitcoin wallet issues a "credible" iPhone hack warning, one closely-watched analyst has predicted the bitcoin halving could catapult the bitcoin price to almost $1.8 million—giving bitcoin a market capitalization of almost $35 trillion even as Wall Street banks issue serious bitcoin halving price warnings.

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Bitcoin's halving—a supply cut that will see the bitcoin block reward cut from 6.25 bitcoin to 3.125—is slated to happen later today, potentially playing havoc with bitcoin industry economics that have changed dramatically since the last supply cut in 2020.

The halving, reducing the daily supply of new bitcoin from around 900 to 450, is now just hours away, according to the NiceHash countdown. The 2024 bitcoin halving is bitcoin's fourth, following previous halvings in 2012, 2016 and 2020.

"If we get a similar run to the previous cycle, looking at historical performances one year after halvings, bitcoin could reach $450,000 a year from now, or $270,000 if this cycle turns out to be more like 2016," Noelle Acheson, bitcoin analyst and author of the Crypto is Macro Now newsletter, wrote, citing Bloomberg data.

However, using Axios data, Acheson found the bitcoin price could "could reach $350,000 (using the previous cycle as a guide), or $1.8 million (applying the 2016 cycle performance)"—giving bitcoin a $35 trillion market cap.

04/20 update: Bitcoin has successfully completed its fourth halving at around 8pm ET after the network issued its 840,000th block, the so-called block height pre-programmed by bitcoin's mysterious creator Satoshi Nakamoto when the block reward would be halved. Bitcoin miners, who secure the network with high-powered computers, will now receive 3.125 bitcoin for each block mined, down from 6.25 bitcoin just yesterday.

The bitcoin price remained stable in the build up to the closely-watched supply cut and in the hours after.

"If the data from previous bitcoin halving cycles can tell us about the upcoming halving, then one could assume that any potential impact is unlikely to become apparent until more than a year, or possibly even 18 months after the event," Michael Anderson, cofounder of crypto-focused investor Framework Ventures, said in emailed comments.

"To put it simply, while halvings tend to get plenty of media attention, and also serve as a timely reminder of the importance of bitcoin’s limited money supply, the reduction in supply issuance hasn’t historically had an immediate effect on the crypto markets. That said, this is the first crypto market cycle where bitcoin has reached an all time high before a halving, which implies that old models are likely less reliable."

The countdown has already begun for bitcoin's next halving, which will see the number of new bitcoin issued to miners cut again, currently scheduled for early March 2028.

"In the short term, the upcoming halving will put supply and demand slightly out of kilter, driving market pressure as more investors seek to get a piece of the pie," Duncan Ash, head of strategy at Coincover, said in emailed comments.

"This is likely to continue until the elevated price deters new investors, which will restore a closer balance between the number of buyers and sellers and settle the market. In addition, the industry will emerge with more users, a higher market cap, and greater liquidity. As such, we’re likely to see a stabilising effect on the market in the mid to long term."

This bitcoin halving is the first that's happened outside the Federal Reserve's zirp-era (zero interest-rate policy), the first after the debut of a fleet of long-awaited Wall Street bitcoin exchange-traded funds (ETFs) and the first since China expelled the country's bitcoin miners in 2021.

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"We are currently in a high inflation, high interest rate environment," Jeff Hancock, the chief executive of crypto app Coinpass, said in emailed comments. "The bitcoin market has matured from a hobby for crypto enthusiasts to a real asset with institutional interest, which is why I feel this cycle will be different," Hancock said, pointing to the fleet of Wall Street spot bitcoin ETFs. "Institutional demand for bitcoin is here to stay."

Bitcoin's halvings will continue every four years or so until around the year 2140. Once the bitcoin network no longer produces new bitcoin, miners will only earn from transaction fees—something they're already preparing for with protocols like ordinals, runes and BRC-20 that have pushed up transaction fees.

After weeks of speculation, including JPMorgan and Goldman Sachs GS GS analysts this week warning the bitcoin price could fall in the halving's immediate aftermath, there's still little in the way of consensus for what the supply cut will mean for the bitcoin price.

Historically, the bitcoin price has climbed in the months following bitcoin's three previous halvings. Andrew O'Neill, a crypto analyst at S&P Global, told Reuters he's "somewhat skeptical of the lessons that can be taken in terms of price prediction from previous halvings."