Bitcoin
The clock is ticking for Bitcoin (BTC) price to rise
The Optimistic Impact of the Halving-Induced Slowdown on Bitcoin Price (BTC) supply expansion tends to occur after 100 days, new research from ETC Group shows.
Bitcoin’s mining reward halving is a hard-coded event that goes into effect every four years or after 210,000 blocks have been mined on the blockchain. The quadrennial event reduces the reward miners receive for validating transactions by 50 percent.
The main goal is to control the supply of bitcoin and ensure that it becomes scarce over time, unlike fiat currencies, which have an ever-increasing supply (monetary inflation). The supply of bitcoin is capped at 21 million, and the reward halving helps manage how quickly this limit is reached.
The first halving, implemented in 2012, reduced the block reward paid to miners from 50 BTC to 25 BTC. In the following two halvings, the block supply dropped to 6.25 BTC. The latest halving, implemented on April 20, reduced it further to 3.125 BTC.
Previous reductions paved the way for multiple price increases, with most of the gains occurring after the first 100 days.
“Today marks exactly 100 days after the Bitcoin Halving event on April 20. The market tends to have short memories, but the halving-induced supply deficit should start to take effect from now on,” Andre Dragosch, head of research at ETC Group, said on X.
Dragosch reached this conclusion after analyzing performance data before and after the three previous reductions implemented in 2012, 2016 and 2020.
The study showed that average overperformance—the difference between performance X number of days after the halving and X number before the halving—increases significantly 100 days after the halving and becomes statistically significant, with “T-values” exceeding 2%.
The t-value is a statistical number used in hypothesis testing to determine how far the sample mean is from the population mean, which is stabilized by the sample variability.
“The main takeaway is that 100 days after the Halving, the performance difference becomes statistically significant (T-value > 2) and then becomes increasingly significant until about 400 days after the Halving,” Dragosch told CoinDesk.
The chart shows that the average overperformance rises above 100% from the 100th day after the halving and eventually peaks in the four digits.
It remains to be seen whether history will repeat itself.