Should You Buy Bitcoin Before Its Next Halving?

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The significant event known as the Bitcoin (BTC) halving, occurring every four years, generates a lot of excitement among crypto investors. This is because, historically, Bitcoin’s price tends to increase significantly within the 12 to 18 months following each halving. For instance, after its scheduled halving in April 2024, Bitcoin has already surpassed the $100,000 mark and recently approached an all-time high of $123,000.

In approximately six years from now, around March 30, 2028, we are anticipating another Bitcoin halving event. The question on everyone’s mind is: Will this occasion cause another surge in Bitcoin’s value, or has the impact of the halving become less significant? Let’s delve deeper to find some answers.

Bitcoin’s track record

A mere few months past, some financial enthusiasts began questioning the significance of Bitcoin’s halving, given that a year following its April 2024 event, the digital currency had only seen a 43% surge in value. (As an observer)

For those unfamiliar with cryptocurrency, a 43% increase may seem remarkable. However, seasoned Bitcoin investors would find this growth rate disappointing at best. Notably, as per the data from crypto research firm Kaiko, this is the poorest performance following a halving event in Bitcoin’s history.

After each halving event (in 2012, 2016, and 2020), Bitcoin experienced significant growth. Specifically, it rose by approximately 541% in the year following the 2020 halving, by around 291% in the year following the 2016 halving, and an astounding 7,000% in the year following the 2012 halving.

It’s understandable that investors might be optimistic about potential high returns from Bitcoin following the 2024 halving, given that the poorest performance after past three halving events still resulted in a significant increase of approximately 291%.

Factors that affect halving performance

There are a number of possible explanations for why the 2024 Bitcoin halving underperformed.

In simpler terms, if you’re a statistician, you might argue that the small sample of just three data points (2012, 2016, 2020) is insufficient to establish a clear long-term pattern or trend with confidence.

As an economist, you would argue that factors on a larger scale within the economy such as inflation, economic growth (GDP), and interest rates have a significantly greater impact compared to any changes in the Bitcoin’s underlying algorithm.

If you’re versed in finance, you might emphasize the significant part institutional investors play, as they now significantly influence Bitcoin’s price. For instance, the anticipated launch of Bitcoin spot exchange-traded funds in January 2024 could potentially impact the Bitcoin halving event that occurred a few months later.

It seems that all these points carry significant weight, but it’s worth considering a more straightforward explanation for Bitcoin’s underperformance: We’re approaching the limit where all Bitcoins that can ever be created will exist. Bitcoin has a fixed supply of 21 million coins, and approximately 19.9 million of them are already in circulation.

In 2012, changes to the rate of supply for new Bitcoins had a significant impact because there were only 10.5 million coins in circulation. However, by 2024, with nearly double the amount of Bitcoin in existence compared to 2012, alterations to the rate of supply mattered less.

From my viewpoint, I’ve often compared the Bitcoin halving to the process of extracting lemon juice for fresh lemonade. Initially, when you first press the lemon, you get a generous amount of juice. However, by the fourth or fifth press, the yield becomes minimal. Eventually, that lemon simply can’t provide any more juice, much like how the Bitcoin halving represents diminishing returns as the supply becomes scarcer and less available.

Don’t forget about the Bitcoin cycle

A widespread misunderstanding regarding Bitcoin is that its value continuously increases. But, upon examining a long-term graph, it becomes clear that there are recurring highs and lows, or peaks and valleys.

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In essence, Bitcoin’s behavior can be described as a recurring pattern of “rally and plunge.” Annually, Bitcoin either ranks as the top-performing asset globally or experiences significant losses. This pattern usually unfolds as follows: following a halving event, Bitcoin’s value significantly increases over a 12 to 18-month period, only to subsequently decline.

When I use the term “crash,” I’m not referring to the casual Wall Street explanation, which is a steep 20% or more market drop. Instead, I’m discussing a significant decrease in Bitcoin’s value, such as dropping by 70%, 80%, or even 90%. If you were to invest in Bitcoin at $120,000 and then witness it plummeting to just $25,000, it could be quite challenging.

The best Bitcoin strategy before the 2028 halving

Instead of asking if you should buy Bitcoin right before its next halving, it would be more accurate to say that you might consider purchasing Bitcoin earlier, by March 2028, as it could potentially rise significantly in value over a longer period.

Instead of purchasing now when a significant, disheartening market collapse seems imminent, it goes against the principle of “buying low and selling high.” The intense disappointment you may experience from cryptocurrency could discourage you from ever considering another Bitcoin investment.

A feasible approach could be regularly investing in Bitcoin through a method known as Dollar-Cost Averaging (DCA). This means setting aside a specific amount of funds to purchase Bitcoin each month, regardless of the market fluctuations. Consequently, you’ll end up purchasing less when the value is high, such as at this moment, but more when it experiences a downturn.

Following this approach, a DCA (Dollar-Cost Averaging) strategy positions you favorably before the next Bitcoin halving scheduled for March 2028. This method allows you to consistently buy Bitcoin, potentially at a time when it might be poised for another significant upward trend.

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2025-07-23 11:07