A recent study by Blockware Intelligence, titled "2024 Halving Analysis: Understanding Market Cycles and Opportunities Created by the Halving," explores the exciting prospect of Bitcoin's price hitting $400,000 during the following halving epoch. The paper examines all of the elements influencing Bitcoin's distinct market cycles and any potential effects of the impending price halving.


Unlike traditional goods, BTC has a fixed schedule for how long it will be available. The study focuses on how the mining subsidy halving is a big reason why Bitcoin's price goes up and down in cycles. This is backed by Bitcoin's public blockchain and predictable supply schedule.

Reduced Bitcoin Prices Lessen Sell Pressure

The analysis highlights the importance of mining subsidy halvings in influencing the market cycles of Bitcoin. According to the study, miners receive newly created BTC, much of which they must sell to fund operating expenses. Miners are responsible for a sizable share of the selling pressure.

The halving events do, however, help to weed out ineffective miners, which lowers sell pressure. According to the analysis, this cutback might cause a sharp decline in Bitcoin mined each year.

If bitcoin doubles to $35,000, bitcoin mining might lose $11.5 billion to $5.7 billion in USD. More than MicroStrategy's Bitcoin treasury reduces annual mining by 164,250. This decline and the departure of less skilled miners raise BTC prices and spur adoption.


New Demand is Created by Cutting

The study underlines that as supply declines due to halvings, demand becomes the main factor in determining the market price of BTC. Data from the past shows that halving events are often followed by an increase in demand.

Market investors are ready to invest at the first hint of rising momentum since halvings generate supply-side dynamics that could cause a significant price increase. On-chain data shows this demand spike, showing halving event interest.

Reductions Cannot Be "Priced In"

The paper argues that halvings' predictability doesn't lessen their impact, contrary to the idea that the market can fully foresee and price them. Front-running halving events would encourage more miners to join the network, increasing sell pressure and slowing price growth.

Additionally, the first miners to leave after a halving frequently have antiquated equipment or high operational costs, significantly lowering sell pressure. This procedure increases the profit margin for the remaining miners, reducing sell pressure even more.

Bitcoin's Historical Volatility and Performance Cycles

The study addresses the infamous volatility of Bitcoin, attributing it to shocks linked to the halving and its quick global growth. Various price fluctuations are associated with each halving cycle, including phases like the Halving, Bull Market, Bear Market, and Recovery.

The research, however, shows that Bitcoin's volatility is more likely to lead to gains in the long run. From the halving time to the top of the next bull market, BTC's price has steadily increased, reaching large multiples at each point.

"Diminishing Returns" Taking into account

People don't like price cuts in half because more Bitcoins could be bought, which would lower profits. The study shows that the frequency doesn't change the price of Bitcoin. Long-term buyers have a lot of Bitcoin they don't want to sell at the current price. This lowers the pressure to sell, which could make bull runs last longer. So, halves may lessen the stress to deal with.

Comparison with Gold

The research compares Bitcoin to gold and emphasizes its positive characteristics, such as its absolute scarcity and improved mobility, divisibility, and fungibility over gold.

This underlines that Bitcoin's inflation rate will fall below 1% after the 2024 halving, lower than gold's. Due to halvings, a BTC price of $400,000 may close its market valuation to gold.