The Bitcoin Halving Is Still a Major Event, Even If Its Impact Has Been Underwhelming So Far

It's fair to say that, until recently, the much-anticipated Bitcoin (BTC -0.94%) halving had largely been underwhelming.

When the recent Bitcoin (BTC -0.94%) halving finally arrived on April 19, many cryptocurrency enthusiasts were expecting an immediate and substantial surge in the coin's price. After all, Bitcoin mining rewards were being cut in half, which should have created a scenario where supply and demand drove the price up quickly.

But much to the surprise of many, Bitcoin price gains have been surprisingly underwhelming since the halving. At the time of the halving, Bitcoin was trading near $64,000. For much of the next month, Bitcoin traded down or sideways, and at one point even dipped below the $57,000 level.

So, what gives? Most halving cycles last anywhere from 12 to 18 months, and there's still plenty of time for the halving effects to kick in. So, what can we expect from this halving in the months ahead, and just how much higher can Bitcoin go?

Let's take a closer look at the data from previous Bitcoin halvings and see what it might tell us about the future.

Data from previous Bitcoin halvingsThe biggest reason for optimism is Bitcoin's price performance after the previous halving events that took place in 2012, 2016, and 2020. In each case, Bitcoin skyrocketed to a much higher price, setting a new all-time high in the process.

For example, after the 2012 halving, Bitcoin rose from around $12 to hit a then-all-time high of $1,250 in December 2013. That's an increase of more than 100-fold in just over a year.

After the 2016 halving, Bitcoin rose from around $700 to hit a then-all-time high of $20,000 in December 2017. That's an increase of nearly 30-fold in just over two years.

And after the 2020 halving, Bitcoin soared from around $10,000 to hit a then-all-time high of $69,000 in November 2021. That's an increase of nearly seven-fold in just over a year.

Of course, past performance is no guarantee of future performance. But it's easy to see why so many analysts were expecting huge price gains for Bitcoin this year. Prior to the 2024 halving, there had been three halvings, and each one brought huge, outsized gains for Bitcoin.

What happened this time?A number of reasons have been offered as to why Bitcoin price gains have been so underwhelming since the recent halving.

One potential explanation is that market participants had already priced in the effect of the halving. This makes a lot of sense if you believe in the efficient market hypothesis. Investors have known the date of the halving for four years, so they had plenty of advance notice.

Another explanation involves the new spot Bitcoin exchange-traded funds (ETFs). The introduction of these ETFs in January sped up the timeline for Bitcoin price appreciation. Bitcoin typically hits a new all-time high after the halving. This time, Bitcoin hit a new all-time high in mid-March, nearly one month prior to the halving. From this perspective, Bitcoin simply peaked too early due to the huge influx of new investor money at the start of the year.

What to expect nowThus, if you were hoping to become an overnight Bitcoin millionaire as a result of the halving, you'll need to readjust your expectations. These things take time. And in the case of the Bitcoin halving, it could take as long as one year to see the full impact.

Take a closer look at the phenomenal returns attributed to the first three Bitcoin halving cycles. It required 300 days or more to generate those eye-popping results.

Will Bitcoin ever hit $1 million?It's encouraging that some Wall Street analysts are actually doubling down on their earlier price forecasts for Bitcoin.

Investment firm Bernstein, for example, still thinks Bitcoin will hit $150,000 by the end of next year. That implies a more than doubling from Bitcoin's current price of $70,000. And Cathie Wood of Ark Invest now believes Bitcoin will hit a price of $1 million sometime before 2030, primarily due to the phenomenal success of the new spot Bitcoin ETFs.

When you dig into the numbers Wood used to make her original $1 million price forecast, you can get a much better grasp of just how well Bitcoin needs to perform after the halving.

In a bull case scenario, she assumed 75% annualized returns for Bitcoin, which led to an ultimate price of $1.48