Bitcoin recently surged to an all-time high of more than $109,000 on January 20, 2024. This remarkable milestone occurred right around the corner from the much-anticipated 2024 halving event. This most recent rally took place only 273 days after the halving. It has sparked renewed debate on how Bitcoin’s market cycle dynamic have shifted, particularly as it relates to the role of institutional investment and Bitcoin ETFs. The 2024 halving reduced new Bitcoin issuance by fifty percent. This cut lowered block rewards from 6.25 to 3.125 Bitcoin, cementing its scarcity.
Because the last halving in April 2024 took place, Bitcoin has already risen over 33%. What makes this case so remarkable is the fact that previous cycles took much longer before a new all-time high was established. Post 2017 halving, Bitcoin reached an all-time high in merely 518 days. In the same vein, after the 2021 halving it took 546 days before hitting another peak.
Bitcoin’s unique scarcity is a key monetary feature, guaranteed by the halving, an automatic protocol-level event that halves block rewards. Unlike traditional currencies, Bitcoin employs a special mechanism that cuts the rate at which new Bitcoins are created, further adding to its scarcity.
It’s possible that institutional investment from firms like Strategy and Tether are accelerating Bitcoin’s classic four-year halving cycle. The sprint to new highs could be further pipelined by the ongoing stream of institutional buying. Bitcoin’s further adoption continues to be heavily influenced by the trajectory of traditional financial markets, general investor sentiment and the global monetary policy outlook.
With growing scarcity triggered by the halving, Bitcoin will likely retest its all-time high if it breaches the $90,000 mark in the coming weeks. - Usi Zade
