Bitcoin’s rally could happen in 2024, says Huobi co-founder
Huobi co-founder Du Jun explained that Bitcoin bull markets are closely tied to halving, which occurs around every four years.
Tue, 22 Feb 2022, 12:20 pm UTC
While Bitcoin (BTC) is yet to fully recover since its slide since the start of 2022, many still believe that the crypto could rally later this year. However, the co-founder of one of the world’s largest crypto exchanges believes that while a rally would eventually arrive, it will likely happen two to three years down the line.
Huobi co-founder Du Jun told CNBC that if past price cycles hold true, Bitcoin may not be seeing a rally until late 2024 or 2025. The crypto exchange CEO explained that Bitcoin bull markets are closely tied to halving, which occurs around every four years.
“In crypto, it’s a cycle every four years,” Du Jun said. “And this happens with halving in Bitcoin.”
Halving is an event incorporated into Bitcoin’s underlying code which cuts in half the reward that miners get for validating transactions on the network. The event happens once every four years.
Historically, halving events are followed by a rally in Bitcoin’s price. During the first halving in 2012, the mining reward was reduced from $50 BTCs to $25 BTCs. Du Jun pointed out that a bull market, where Bitcoin’s price climbed from $20 per coin to almost $2,000, happened in 2013.
The same thing happened in the second halving event in 2016 when mining reward was reduced by half from 25 to 12.5 BTCs. The following year, the second bull market started in October 2017 and Bitcoin’s price rose to around $19,000 by December that year.
The latest halving, which happened in May 2020 and further reduced mining reward to 6.25 BTCs, was also followed by a market rally. Bitcoin rose from around $3,000 to set a new all-time high above $68,000 in November 2021.
Bitcoin tumbled after setting new ATHs in previous crypto rallies. At the moment, Bitcoin is trading around 40 percent lower than its November 2021 all-time high, which basically followed previously observed patterns.
This could also mean that the bear market has started. “If this circle continues, we are now at the early stage of a bear market,” Du explained.
However, the crypto exchange CEO warned that the prediction is not exactly foolproof as this time, there could be factors at play that were not present in previous price cycles. “It is really hard to predict exactly because there are so many other factors which can affect the market as well — such as geopolitical issues including war, or recent Covid, also affect the market,” he added.
But if the halving and bull market correlation still holds true in the next halving event two years from now, investors might have to wait a couple of years more before Bitcoin’s much-anticipated rally. “Following this cycle, it won’t be until end of 2024 to beginning of 2025 that we can welcome next bull market on bitcoin,” he added.
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