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An Empirical Examination of Bitcoin’s Halving Effects: Assessing Cryptocurrency Sustainability within the Landscape of Financial Technologies

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Listed:
  • Juraj Fabus

    (Department of Communications, Faculty of Operations and Economics of Transport and Communications, University of Zilina, 01026 Zilina, Slovakia)

  • Iveta Kremenova

    (Department of Communications, Faculty of Operations and Economics of Transport and Communications, University of Zilina, 01026 Zilina, Slovakia)

  • Natalia Stalmasekova

    (Department of Communications, Faculty of Operations and Economics of Transport and Communications, University of Zilina, 01026 Zilina, Slovakia)

  • Terezia Kvasnicova-Galovicova

    (Department of Communications, Faculty of Operations and Economics of Transport and Communications, University of Zilina, 01026 Zilina, Slovakia)

Abstract

This article explores the significance of Bitcoin halving events within the cryptocurrency ecosystem and their impact on market dynamics. While the existing literature addresses the periods before and after Bitcoin halving, as well as financial bubbles, there is an absence of forecasting regarding Bitcoin price in the time after halving. To address this gap and provide predictions of Bitcoin price development, we conducted a rigorous analysis of past halving events in 2012, 2016, and 2020, focusing on Bitcoin price behaviour before and after each occurrence. What interests us is not only the change in the price level of Bitcoins (top and bottom), but also when this turn occurs. Through synthesizing data and trends from previous events, this article aims to uncover patterns and insights that illuminate the impact of Bitcoin halving on market dynamics and sustainability, movement of the price level, the peaks reached, and price troughs. Our approach involved employing methods such as RSI, MACD, and regression analysis. We looked for the relationship between the price of Bitcoin (top and bottom) and the number of days after the halving. We have uncovered a mathematical model, according to which the next peak will be reached 19 months (in November 2025) and the trough 31 months after Bitcoin halving 2024 (in November 2026). Looking towards the future, this study estimates predictions and expectations for the upcoming Bitcoin halving. These discoveries significantly enhance our understanding of Bitcoin’s trajectory and its implications for the finance cryptocurrency market. By offering novel insights into cryptocurrency market dynamics, this study contributes to advancing knowledge in the field and provides valuable information for cryptocurrency markets, investors, and stakeholders.

Suggested Citation

  • Juraj Fabus & Iveta Kremenova & Natalia Stalmasekova & Terezia Kvasnicova-Galovicova, 2024. "An Empirical Examination of Bitcoin’s Halving Effects: Assessing Cryptocurrency Sustainability within the Landscape of Financial Technologies," JRFM, MDPI, vol. 17(6), pages 1-23, May.
    • Handle: RePEc:gam:jjrfmx:v:17:y:2024:i:6:p:229-:d:1404365
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    References listed on IDEAS

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    1. Dean Fantazzini & Nikita Kolodin, 2020. "Does the Hashrate Affect the Bitcoin Price?," JRFM, MDPI, vol. 13(11), pages 1-29, October.
    2. Jireh Yi-Le Chan & Seuk Wai Phoong & Seuk Yen Phoong & Wai Khuen Cheng & Yen-Lin Chen, 2023. "The Bitcoin Halving Cycle Volatility Dynamics and Safe Haven-Hedge Properties: A MSGARCH Approach," Mathematics, MDPI, vol. 11(3), pages 1-19, January.
    3. Adam Hayes, 2015. "A Cost of Production Model for Bitcoin," Working Papers 1505, New School for Social Research, Department of Economics.
    4. de la Horra, Luis P. & de la Fuente, Gabriel & Perote, Javier, 2019. "The drivers of Bitcoin demand: A short and long-run analysis," International Review of Financial Analysis, Elsevier, vol. 62(C), pages 21-34.
    5. Dyhrberg, Anne Haubo, 2016. "Bitcoin, gold and the dollar – A GARCH volatility analysis," Finance Research Letters, Elsevier, vol. 16(C), pages 85-92.
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    1. Alaminos, David & Salas-Compás, M. Belén & Fernández-Gámez, Manuel Á., 2024. "Can Bitcoin trigger speculative pressures on the US Dollar? A novel ARIMA-EGARCH-Wavelet Neural Networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 654(C).

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