Timing the Bitcoin Halving Cycle
The next halving date is likely in April 2024
Chief Investment Office, Daryl Ho7 Jul 2023
  • Cryptocurrency bull markets have a regular catalyst - the Bitcoin halving event
  • The next occurrence is expected to arrive in April 2024
  • Crypto enthusiasts should no longer expect the same returns as early adopters
  • Nonetheless, the cyclical regularity implies a way to estimate the best time of entry into Bitcoin
  • We calculate that to be 1-2 months before the halving event
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Waiting with bated breath. If there was one major catalyst that every cryptocurrency enthusiast is eagerly anticipating, it is the Bitcoin halving event. In no other market does a bull cycle appear with such regularity; this is a quirk unique to Bitcoin due to its immutable protocol of ever-diminishing supply. Mining rewards are halved after every 210,000 blocks mined – occurring approximately once every four years – resulting in a sudden supply crunch that multiplies cryptocurrency prices within a relatively short timeframe. Given that the next Bitcoin halving event is estimated to occur in April 2024, we consider that now is as good a time as any to prepare the groundwork; by looking at data over past cycles to ascertain the best moment for traders to ride the next cryptocurrency wave – to the moon.

Figure 1: Past halving events are closely tied with bull market cycles

*in USD, log scale, indexed (halving date = 0)
Source: Bloomberg, DBS

Curb your enthusiasm. Not to ruin the mood before the party begins, but we do feel it apt to manage some expectations for the cycle ahead (Not FUD). Like every other maturing innovation, one should not expect gains to be in the magnitude of those experienced by early adopters. As observed with Bitcoin, each successive halving cycle has brought ever-lower multiples on returns from the point of halving to its then all-time high (ATH), with a longer time-to-peak. Speculators can still expect decent returns if they time it right, but we expect that they would ask “wen moon/lambo?” with a lot more uncertainty than before.

Best to position 1-2 months before the halving event. We calculate this by working backwards from the ATHs in previous cycles, calculating the point at which one had the highest “per-day” gains in holding Bitcoin during its upswing, to avoid being too early and taking unnecessary volatility. Curiously, in each cycle, the entry point for the highest per-day gains fell around 1-2 months before the halving event (we discount the noise around the first halving event given its infancy). Of course, this assumes the investor knows exactly when to exit at the ATH, which is frankly a fool’s (or whale’s) errand. However, we note that the bull cycle had typically lasted between 1-1.5 years, so there is a rough estimate for how long one should HODL. Noting that the next halving date is likely in April 2024, the start of the year is probably a good time to take a position in Bitcoin for anyone who’s feeling the FOMO (fear of missing out).


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