Bitcoin price hits 2023 high as ‘bullish event’ looms

Upcoming bitcoin halving has historically led to major crypto market movements

Bitcoin’s market cap reached above $600 million in July 2023, a level it has not seen since June 2022 (Getty Images/ iStock)

The price of bitcoin has experienced the strongest first half of a year since 2019, nearly doubling in value since the start of 2023.

The world’s leading cryptocurrency reached above $31,000 this week, up from $16,000 in January, pushing its market cap above $600 million for the first time in more than a year.

Some crypto analysts suggest the approaching ‘halving’ event, which will see bitcoin mining rewards drop by 50 per cent, could be one factor behind the cryptocurrency’s positive price trend.

Bitcoin’s halving takes place roughly every four years, with the crypto’s price cycles viewed by many traders and investors as being intrinsically link to the event. Sometimes referred to as “the halvening”, the seismic event is built-in to bitcoin’s technological foundations, and is aimed at making the digital currency anti-inflationary by reducing its supply.

“The months prior to the halving have historically seen the start of a bullish trend for the market, hence the market participants are carefully looking at the second half of 2023,” Matteo Greco, a research analyst at the fintech investment firm Fineqia International, told The Independent.

“Riot Platforms, an industry leader in bitcoin mining and data centre hosting, announced a $162 million investment to purchase 33,280 miners, aiming to nearly double its computational power in anticipation of the next halving.”

Mr Greco pointed to the cryptocurrency litecoin, once referred to as the silver to bitcoin’s gold, which typically experiences its halving event a few months before its more famous rival.

In the months leading up to Litecoin’s halvings in 2015 and 2019 its price saw massive gains, which were then replicated by bitcoin.

Litecoin’s next halving is currently scheduled for 3 August 2023 and it is once again experiencing a significant price increase, outperforming broader market trends.

“Litecoin often served as a sentiment metric on the bitcoin halving,” Mr Greco said. “The big increase in price, while most of the altcoins keep lagging, suggests bullish sentiment is increasing ahead of the next BTC halving.”

Bitcoin’s halving is currently scheduled for 26 April, 2024, with pseudonymous crypto trader PlanB noting another historic price trend that could signal more gains over the coming months.

“Buy bitcoin six months before a halving and sell 18 months after a halving has historically beaten ‘buy and hold’ [trading strategy],” he tweeted on Monday.

“The next halving is in April 2024... Will this strategy work again?”