News - Bitcoin Halving: this is how big the returns were in the past

By Mike Hesp

Bitcoin Halving: this is how big the returns were in the past

Bitcoin (BTC)
Mining

Bitcoin halving means that the reward for mining a block on the blockchain will be cut in half. Starting next year, rewards for miners will be cut in half again. In the past, this was a profitable business.

In the coming year, Bitcoin miners will have to grit their teeth. Because starting in April 2024, they will receive only 3.125 BTC per mined block as a reward for their work - that's exactly half the current reward.

This is because the cryptocurrency has a disinflationary structure. Thus, over time there is less and less supply, until at some point the maximum of 21 million BTC is reached. Bitcoin is thus a counterpart to inflationary fiat currencies such as the U.S. dollar, euro and co.

Theoretically, this decreasing supply could also mean rising prices. Many investors therefore assume that the Bitcoin price after halving will rise. At least that is how it has been in the past.

Here's how big Bitcoin halving returns have been in the past

Reddit user /u/zeehkaev, real name Jose Roberto, took historical Bitcoin price data and calculated how high the returns were for those who had bought BTC before the last Bitcoin halving.

His result: those who had bought BTC four months before the halving should always be in the green after a certain amount of time hodling. Absurd return: if you had bought coins four months before the first halving and waited until today, you would have earned a return of 259,574.19 percent. But even those who are not Bitcoin early adopters and superhobbyists rolled into one have a chance for returns.

Those who bought BTC about four months before the last halving and held the coins for just one year would have made a return of 547.48 percent. A fivefold increase within a year - such returns are rare with other forms of investment.

Will the Bitcoin price rise so much again this time?

The short answer: no one can predict that. You cannot even say with certainty that halvings in the past were also responsible for price increases. Just because two things have striking similarities does not mean they are interdependent. The fact is that Bitcoin has become increasingly popular and well-known over the years, apparently convincing more and more people of its merits as an asset class. This inevitably led to (volatile) price increases.

But it is also a fact that Bitcoin halving has become a heavily hyped event. Not only is it being styled as a super event in the crypto community, but coverage far beyond the crypto media can be expected next time around. It cannot be ruled out that this will be accompanied by rising prices.

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