3 reasons I still look forward to the next Bitcoin Halving

It has just been over a year since the last halving of Bitcoin (CRYPTO: BTC), which took place on April 20, 2024. The next halving is not expected to occur until mid-April 2028. But I have been looking forward to it for at least three reasons, and I have been preparing for it.

1. Supply constraints will increase If you are a long-term investor and a long-term holder of Bitcoin, then each halving is an increase in supply dynamics that makes this coin scarce. In other words, halving needs to occur for the price of the asset to continue to rise, assuming there is stable demand. Halving is named as such because when it occurs, on average about every four years, the reward that miners receive for mining a Bitcoin block is cut in half. As a result, these miners have less new supply to sell on the market to provide the fiat liquidity they need to fund their capital and operational costs. This means that buyers have to compete more fiercely with the coins being offered, driving the price up. Halving contributes to scarcity, although it does not guarantee that prices will rise. The issue is that halving allows the same group of buyers to push prices higher than before; there does not need to be a significant increase in new interest in Bitcoin. And as holders as well as consistent buyers, all of this is something to look forward to, as it means that becoming wealthier may be on the horizon.
2. Running ahead may and will increase the price next time. Even if you plan to hold your money forever, like I do, it is still very exciting when the price goes up. And the halving has a known impact on the price, but it is not exactly what the previous part might lead you to think. The exact date of the halving event is not known in advance, as it only occurs after every 210,000 Bitcoin blocks are mined. However, a fairly close estimate of the halving date can be made based on the rate of block mining, which automatically adjusts every two weeks or longer to try to keep the mining time for each block around 10 minutes. Wise investors know that there is no need to predict the date of a specific catalyst to benefit from the increase it may have; you can simply buy the asset beforehand and then enjoy the results whenever the catalyst occurs. And that's what tends to happen with Bitcoin: The price often rises in the 12 to 18 months leading up to the estimated halving event when sophisticated actors lead the event. Take a look at this chart:

Now consider that before the most recent halving, halvings occurred in May 2020 and July 2016. I have a long-term strategy of accumulating Bitcoin at a slow pace regardless of its price, but a stronger buying season to prepare for the next halving is only about a year and a half away. The price may rise during that time. And that opportunity period is really exciting, to put it mildly. 3. It can create an alternative season Traditionally, the altcoin season tends to occur within 12 to 18 months after the Bitcoin halving. The term "altcoin season" refers to the period when many altcoins experience significant price increases. They are very exciting if you hold altcoins -- basically all cryptocurrencies except Bitcoin -- because that is when you see whether the market believes your investment decision is wise or just a pipe dream. This is also the best opportunity that most investors have to exit their investments in altcoins made at favorable entry points when prices are at the bottom. The reason altcoin seasons tend to coincide with the period after halving is that new Bitcoin holders become wealthy, having just escaped the high of the coin after halving, taking some of their winnings and investing in riskier plays in smaller cryptocurrencies with strong potential for price increases. Whether this argument will continue to hold true remains difficult to determine, but the timing of previous altcoin seasons aligns quite well with the narrative. Because the alt season is when the market decides which coins and tokens have value and which are just hot air, they tend to determine which projects survive and become a permanent part of the cryptocurrency ecosystem, and which projects will fade away. There is no guarantee that a coin will last long just because its price skyrockets during the alt season, but the best teams in the cryptocurrency space tend to seize the moment by using the funds generated from the growth of their coin to finance the next steps of their strategic plan. Therefore, the halving tends to provide many opportunities for investors to discover altcoins that have the potential to become the strongest investment.