With ease, Ethereum is currently ranked as the second most valuable cryptocurrency in the world, and it appears that this ranking will only grow with time. The halving of Bitcoin, which is undoubtedly the biggest cryptocurrency event of the upcoming year, is predicted to have a big effect on Ethereum’s market as well as all other cryptocurrency markets.
This post will discuss our forecast for Ethereum’s price following the halving and examine whether or not Ethereum is likely to be a wise long-term investment. Let’s first examine Ethereum’s performance throughout past Bitcoin halvings.
What was Ethereum’s performance before and after the halving of Bitcoin?
First of all, we must remember that in 2012, when the first Bitcoin halving took place, Ethereum was not even a concept. The sample size of Ethereum’s price behavior before and after Bitcoin halvings is minuscule, given ETH has only been around for two of the cryptocurrency’s halvings.
| DATE | ETH PRICE 1M BEFORE HALV. | ETH PRICE AT HALV. | ETH PRICE 1M AFTER HALV. | ETH PRICE 3M AFTER HALV. | |
|---|---|---|---|---|---|
| 2ND BTC HALVING | Jul 9, 2016 | $14.7 | $11 | $11.7 (+6.3%) | $11.2 (+1.8%) |
| 3RD BTC HALVING | May 11, 2020 | $160 | $211 | $249 (+18%) | $398 (+88.6%) |
If we examine ETH’s performance during the second Bitcoin halving and its performance during the third Bitcoin halving, we can observe that the price activity surrounding these halvings has been very different.
During the July 2016 second Bitcoin halving, the Ether market was comparatively quiet. In fact, the month before the second Bitcoin halving, the price of ETH dropped by 25%. Although there was only a slight recovery following the halving, the price of ETH was only 1.8% higher three months later than it was at the time of the halving.
When the third Bitcoin halving occurred in May 2020, Ethereum was in a far better position. In the month preceding the third halving, ETH rose by 31.8%. When compared to its price at the time of the halving, Ether had increased by an astounding 88.6% three months later.
This makes it hard to predict what will happen to the price of Ethereum when the fourth Bitcoin halving draws near. Bitcoin halvings are often viewed as positive developments that uplift the market’s general mood. Therefore, it could be worthwhile to think about raising your ETH stack a little bit before to the halving.
What is the expected price of Ethereum following the 2024–2025 Bitcoin halving?
According to the majority of predictions, the second Bitcoin halving is anticipated to take place around the middle of April 2024. As of right now, CoinCodex’s Ethereum price prediction estimates the price of Ethereum at around $3,900 on April 15, 2024. This would represent a 75% rise over the price of Ethereum as of this writing, although it would still be roughly 25% behind the cryptocurrency’s all-time high.
Regarding the Ethereum price projection for 2024 and 2025, the analysis predicts that shortly after the Bitcoin halving, the price of ETH will accelerate significantly, reaching new all-time highs in late July of 2024 slightly over $6,300.
According to the projection, ETH will next decline and find support at about $3,700 before starting to rise again, with a peak expected to be reached above $7,300 in March 2025.
Should I invest in Ethereum long term?
The idea behind the Ethereum triple halving makes Ethereum seem like a very attractive long-term investment. The Ethereum protocol has characteristics that put deflationary pressure on its supply even though it lacks a halve mechanism:
- Reduced ETH issuance under Proof-of-Stake consensus
- ETH burning via the EIP-1559 upgrade
- Ethereum staking lowers the amount of ETH that is effectively in circulation
As long as there is a significant demand for ETH transactions on the Ethereum market, these three variables will continue to contribute to the reduction of the ETH supply and render ETH deflationary. Given Ethereum’s present course and its position as the clear leader in the smart contracts industry, holders of ETH have a bright future ahead of them.
As of now, there hasn’t been any discernible pattern in Ethereum‘s behavior leading up to and following Bitcoin halvings. Naturally, there is a very small amount of historical data because Ethereum has only existed for two Bitcoin halvings. In general, given that the cryptocurrency markets are typically upbeat in the run-up to Bitcoin halvings, it could be a smart idea to buy some ETH as the halving draws near.
Thanks to its tokenomics, ETH seems to be well-positioned for the long run. The protocol requires issuing a lot less new ETH tokens after switching to Proof-of-Stake, as EIP-1559 continuously burns the ETH used to cover transaction fees.
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Post time: Dec-19-2023
