This is how Bitcoin could increase 700% by 2025

During Bitcoin‘s (BTC -0.59%) Impressive run over the last 14 years, it has proven the naysayers wrong time and time again as it smashed previous records. Since it reached its last all-time high of around $68,000 in November 2021, the next hope for investors is that the price will one day reach six figures.

Predictions for a $100,000 Bitcoin are common these days. But often they lack substance, evidence or any legitimate reasoning. Let’s try to change that.

To paint a clearer picture of what may be in store for Bitcoin, our analysis needs to use data. Knowing where Bitcoin has been can help formulate more realistic estimates of where it might be headed, rather than using wishful thinking.

Looking at the data, a few things become clear. First, Bitcoin’s price behavior is significantly affected by an event known as a halving. And because of the great influence of the halving, we can even predict when the cryptocurrency will hit a certain price. Before going into this, however, an understanding of halvings is necessary.

A true Bitcoin feature

Halving is what helps make Bitcoin unique because of its role in mining and the creation of new bitcoins. When miners successfully mine a block, they are rewarded with newly minted bitcoins. This is the primary way new bitcoins come into circulation.

When a halving occurs, it halves the amount of bitcoins awarded to miners, thus reducing the rate of new coins in circulation.

These halvings take place every 210,000 blocks, or roughly every four years. The first halving happened in November 2012 and dropped the block reward from 50 bitcoins to 25. The second was in the summer of 2016. And the last one was in May 2020, which resulted in the reward being cut from 12.5 to 6.25 bitcoins.

What Bitcoin might look like at the next halving

When we analyze the data, it becomes clear that at the time of each halving, Bitcoin’s price is about 50% lower than its previous record high. This is important to understand so that we can more accurately estimate where it may be heading.

If the price of Bitcoin at the time of the halving is about 50% of the previous record high, we can assume that in May 2024 Bitcoin could be worth around $34,000 based on the current record high of about $68,000.

From here we have to look at what happens after the halving. With the halving reducing the frequency of new coins entering circulation, Bitcoin’s price tends to make its most significant gains after this, as the market adjusts to a more limited supply.

Looking at Bitcoin’s performance after previous halvings, two things become clear. On average, Bitcoin returns about 25% less with each new cycle, and a new record is usually made a year and a half after the halving.

Since we know that the last cycle gave a return of 670%, we arrive at around 500% increase for the upcoming halving. A rise of this size from our speculative price of $34,000 in May 2024 would result in a new record high of more than $200,000 sometime in the second half of 2025.

These estimates and timelines are speculative. But unlike other predictions, this scenario takes data into account and relies on verifiable trends surrounding halvings. Until the data proves otherwise, that’s all we can base estimates on.

As such, with the integrity of the data still intact, buying crypto today can prove to be extremely lucrative as the price is around $25,000.

Should Bitcoin behave as it has in the past and reach our projected $200,000; that would represent a 700% increase from today’s price. Even better, time is on our side: 2025 remains in the distance.