While there is no guarantee of future movements on any asset, Bitcoin’s halving has been quite successful in predicting bull markets. The bear market of 2022 was tough. But now it’s probably over as many investors are showing interest in cryptocurrencies once again.
Halving as a catalyst for Bitcoin’s bull market
The Bitcoin halving, a pivotal event occurring approximately every four years, is looming on the horizon. In previous instances, this reduction in the issuance of new bitcoins has triggered substantial bull markets.
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It’s pretty visible if people look at the time period after Bitcoin halvings that occurred in 2012, 2016, and 2020. With each Bitcoin halving, the whole crypto market skyrocketed.
Rainbow chart of Bitcoin, souce: blockchaincenter.net
As the logic of supply and demand dictates, when supply diminishes while demand remains constant, prices must inevitably rise. The upcoming halving is merely 12 months away, and investors are bracing themselves for the potential price surge.
A shift in market participants
Once the halving-triggered bull market gains traction, momentum traders inevitably join the crypto train. As the Bitcoin price ascends, they add fuel to the fire, causing a bubble that eventually bursts. Subsequently, they exit the market, leaving the market to the steadfast hodlers.
Bitcoin hodlers have been rising to new maximums along with Bitcoin wallets. There are now approximately 80,000 Bitcoin millionaires, or people who own more than 1 million dollars worth of Bitcoin. The demand for crypto is absolutely present.
No new lows for Bitcoin any time soon
The previous year saw a cascade of negative news in the crypto space, impacting Bitcoin’s price. Several prominent players, such as Terra, Three Arrows Capital, Celsius Network, Voyager Digital, FTX, and others, suffered significant setbacks or closures.
These bankruptcies set the whole crypto space on fire, drawing Bitcoin below its previous all-time high ($20,000) for the first time ever.
However, recent concerns around crypto banks such as Silicon Valley Bank did not push Bitcoin to new lows. Actually, the opposite happened. Bitcoin skyrocketed, benefiting from the crash of several large banks. The market had already purged weak hands, demonstrating the resilience and maturity of the Bitcoin ecosystem.
The cycle continues
Until Bitcoin transcends its four-year price cycles, history is bound to repeat itself. In each bear market, the price follows a similar trajectory – a peak, a series of lower highs, and a final capitulation that causes massive pessimism across the whole industry.
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The future may hold more of the same, but there is reason for optimism. As the market matures and adoption grows, the cycles may become less relevant.
3 reasons to be bullish
If the four-year cycle persists, certain conclusions can be drawn. First, it is unlikely that Bitcoin will ever revisit the $16,000 price point, barring any significant market liquidation event. Second, Bitcoin has demonstrated remarkable resilience in the face of regulatory pressures, proving its long-term goal and trajectory.
This status is unlikely to change, as even the highly active SEC Chair, Gary Gensler, must acknowledge Bitcoin’s unique position. Finally, financial advisors and institutions are currently under-allocated to Bitcoin, presenting a significant opportunity for adoption in the coming bull market.
Preparation for the bull market
Now is an opportune moment for financial advisors to enlighten their clients about the benefits of including Bitcoin in their investment strategies. As the bear market probably draws to a close, investors should seize the chance to incorporate this unique asset into their portfolios.
With the resolution of past regulatory and product-related issues, there are fewer barriers to entry for financial advisors and their clients. People will, sooner or later, allocate part of their portfolio to Bitcoin.
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Moreover, as traditional financial institutions gradually embrace digital assets, there is an increasing likelihood of Bitcoin integration into various investment products and services. This mainstream acceptance will contribute to its long-term value and stability.
🚨 @Mastercard plans to broaden its #crypto card program by forging new alliances with cryptocurrency exchanges.
🚀 This decision is being made despite the fact that US regulations are still up in the air. Users will be able to utilize their #digital assets with the help of…
— Investro.com (@investrocom) April 28, 2023
The stage is set for the next Bitcoin bull market to commence. With a well-informed investor base and increased adoption, the future of Bitcoin looks promising. Investors who act now may be well-positioned to reap the rewards of this transformative digital asset.
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