Bitcoin is down ahead of the halving, trading now for under $63,000 per coin following a huge sell-off over the weekend.
But paying attention to 2020 data is more important, claims Bitfinex—and shows that the biggest cryptocurrency around still has room to run during this cycle.
That’s according to a new report from the crypto exchange, which wrote that investors should look at history to see what the upcoming halving event will do to the asset’s price.
Bitcoin miners will have their rewards cut in half at the weekend, from 6.25 BTC to 3.125 BTC for each block they process. The price of Bitcoin has gone up in value each time following the quadrennial update to the cryptocurrency’s code.
And this time will be no different, according to the report.
“More fundamental to Bitcoin price dynamics is this week’s halving, which as it approaches has seen a notable surge in BTC leaving centralized exchanges, and a decrease in the inactive supply of BTC that has not moved in over a year, to an 18-month low,” it said.
The report added that Bitcoin investors did the same thing back in 2020 following the halving—and just before the price of the asset rocketed to new highs in 2021.
“This pattern suggests we may be entering a similar growth phase,” it said.
Simply put, long-term holders are moving their coins to cold storage in anticipation of a price rise, the report claimed.
After each halving event the price of Bitcoin has gone up—although not immediately. Following the latest halving, which took place on May 11, 2020, Bitcoin was valued at $8,500.
The next year, the coin experienced a bull run and the biggest digital coin hit $69,044 by November.
Edited by Andrew Hayward