Will Bitcoin reach $ 100,000 by 2024?

This article was originally published on Fool.com. All figures are stated in US dollars unless otherwise stated.

In just 13 years, Bitcoin (CRYPTO: BTC) went from trading for just a few pennies to almost $ 69,000 at the top. Although the world’s original cryptocurrency is only worth around $ 21,000 today, many are optimistic that Bitcoin will recover.

These hopeful price predictions use different methods and different rationale for their estimates. For this evaluation of Bitcoin’s future price, we will focus on the patterns between halving events and use the year 2024 as the deadline, since that is when the next Bitcoin halving will take place.

Halving events is what helps make Bitcoin so unique. Bitcoin’s code is programmed to ensure that the growth in the offer falls over time. Since Bitcoin’s code is open source, we can do some math and find out that Bitcoin’s block reward is halved every 210,000 blocks – or about every four years.

The halving events serve as a simple marker to track the development of Bitcoin’s price. Bitcoin analysts refer to the time between each halving as a cycle.

Bitcoin’s first halving was in November 2012 and the block reward fell from 50 Bitcoins to 25. The second was in the summer of 2016. And the last was in May 2020, which resulted in the reward being cut from 12.5 to 6.25 Bitcoins.

A little data exploration never hurt

When you look at the data between halves, a few things become clear. First, the price of each halving is approximately 55% lower than the all-time high of the previous cycle.

Before Bitcoin’s first halving, the price peaked near $ 34 in June 2011. At the time of halving in November 2012, Bitcoin was worth about $ 12 – a drop of just over 60%. At halving in 2016, Bitcoin was worth around $ 650. This was about a 45% decrease from Bitcoin’s previous record high of around $ 1,200 in November 2013.

A similar situation occurred at halving in May 2020. At that time, Bitcoin was worth around $ 8,800 – almost 65% less than the record in December 2017. When we take an average of these reductions, we find that Bitcoin’s price is on average about 55% lower than the previous all-time high when halving occurs.

The next halving is set to take place around May 2024. Simple mathematics can help us arrive at a possible price that Bitcoin will reach by then. In the current cycle, Bitcoin peaked at almost $ 69,000 in November 2021. So, based on past behavior, Bitcoin’s price should be about 55% lower than that. This means a price of around $ 30,000 if previous patterns continue at the time of the next halving.

Another insight we can gather from data is that the amount of Bitcoin increases between each halving decreases from the previous cycle.

Bitcoin traded for around $ 11 at the time of the first halving in November 2012. It then peaked in December 2013 at around $ 1100 – an increase of almost 10,000%. From the next halving in July 2016, Bitcoin’s price rose from around $ 650 to a new high in December 2017 of just under $ 20,000 – almost 3,000% gain. From the last halving in May 2020, when it was traded for around 9,000 dollars to a record high of just under 69,000 dollars in November 2021, Bitcoin increased by approx. 670%.

It becomes even clearer that Bitcoin’s return decreases with each halving cycle that passes. But how much will the price increase after the next halving?

On average, Bitcoin gives about 25% less return with each new cycle. If we subtract a quarter from the previous 670% return, we come to an increase of about 500%. A gain of this magnitude from our speculative price of $ 30,000 in May 2024 will mean a new all-time high of almost $ 150,000.

The bigger picture

We could speculate on the price of Bitcoin until the last Bitcoin was mined sometime after 2100. Whatever the actual price will be, there is one clear trend that has held: Those who hold Bitcoin longer are rewarded with better returns as each halving goes. .

Investors who bought Bitcoin after halving in May 2020 have probably not seen a large return. To maximize potential returns, the data show us that Bitcoin should be kept for at least one halving. Although the recent weakness in Bitcoin led to a blow to each portfolio, current prices should be seen as an opportunity to increase exposure before the next halving in May 2024.

This article was originally published on Fool.com. All figures are stated in US dollars unless otherwise stated.