Hero's Image

Bitcoin’s Halving: Scarcity in the Spotlight


For investors considering a bitcoin (BTC) allocation, one of the most important features to understand is its supply constraints. These characteristics differentiate the world's largest cryptocurrency from other investable assets and include its: 


  • Scarcity: Bitcoin’s fixed supply of 21 million is permanently capped and maintained by a vast, distributed network of computers (i.e., nodes).

  • Disinflation: The rate of new BTC creation (inflation rate) diminishes regularly. Halvings achieve this by reducing miner rewards, increasing scarcity.

  • Consistency: Halvings occur every four years and ensure a predictable and transparent reach of the supply cap. The next halving is scheduled for April 19.


Bitcoin’s supply and annualized inflation rate1

In the past, halvings have triggered significant price increases in subsequent months, so it is reasonable to look at historical performance and anticipate a repeat of history. While it’s not possible to pinpoint exactly what drives performance, we believe the increasing demand from newly approved bitcoin ETFs in the US and a favorable macro landscape will help BTC reach a new all-time high in the next 12-18 months. However, the path in bull markets always includes corrections, similar to what we have seen over the last week, so we envision continued volatility on the way to BTC hitting a new high.  


What is important for investors to keep in mind is that halvings are reminders of the key aspects of Bitcoin that underpin its investment case. In the near term, there are three considerations for investors trying to better understand the impact of this next halving:

  1. Price Potential: Past halvings suggest the strongest returns for BTC occur 12-18 months after the event. While Bitcoin has seen positive performance in the lead-up, history suggests further gains are likely.

  2. Market Dynamics: Considering strong investor demand, exceeding $100,000 within 18 months post-halving is a reasonable expectation. Bitcoin's historical trajectory suggests a potential all-time high within this timeframe.

  3. Inflation Rate: Halvings highlight Bitcoin's unchangeable monetary policy, particularly its disinflationary nature compared to traditional assets. BTC will soon boast the lowest inflation rate amongst gold and fiat currencies.


Beyond these points, the overall investment case for Bitcoin remains highly compelling as institutional adoption, fueled by ETF approvals, and recent network advancements have strengthened its prospects. We believe these dynamics are creating an attractive entry point for investors with long-term horizons.

To learn more about the Bitcoin Halving, see our primer here.


 1 Hashdex Research according to the theoretical supply schedule of Bitcoin since inception. Past halving years according to the dates of previous events, and projected future dates assuming average block times of 10 minutes until 2064.


This material expresses Hashdex Asset Management Ltd. and its subsidiaries and affiliates (“Hashdex”)'s opinion for informational purposes only and does not consider the investment objectives, financial situation or individual needs of one or a particular group of investors. We recommend consulting specialized professionals for investment decisions. Investors are advised to carefully read the prospectus or regulations before investing their funds. The information and conclusions contained in this material may be changed at any time, without prior notice. Nothing contained herein constitutes an offer, solicitation or recommendation regarding any investment management product or service. This information is not directed at or intended for distribution to or use by any person or entity located in any jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation or which would subject Hashdex to any registration or licensing requirements within such jurisdiction. No part of this material may be (i) copied, photocopied or duplicated in any form by any means or (ii) redistributed without the prior written consent of Hashdex. By receiving or reviewing this material, you agree that this material is confidential intellectual property of Hashdex and that you will not directly or indirectly copy, modify, recast, publish or redistribute this material and the information therein, in whole or in part, or otherwise make any commercial use of this material without Hashdex’s prior written consent. 

Investment in any investment vehicle and cryptoassets is highly speculative and is not intended as a complete investment program. It is designed only for sophisticated persons who can bear the economic risk of the loss of their entire investment and who have limited need for liquidity in their investment. There can be no assurance that the investment vehicles will achieve its investment objective or return any capital. No guarantee or representation is made that Hashdex’s investment strategy, including, without limitation, its business and investment objectives, diversification strategies or risk monitoring goals, will be successful, and investment results may vary substantially over time. Nothing herein is intended to imply that the Hashdex s investment methodology or that investing any of the protocols or tokens listed in the Information may be considered “conservative,” “safe,” “risk free,” or “risk averse.”

Certain information contained herein (including financial information) has been obtained from published and non-published sources. Such information has not been independently verified by Hashdex, and Hashdex does not assume responsibility for the accuracy of such information. Hashdex does not provide tax, accounting or legal advice. Certain information contained herein constitutes forward-looking statements, which can be identified by the use of terms such as “may,” “will,” “should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue”  “believe” (or the negatives thereof) or other variations thereof. Due to various risks and uncertainties, including those discussed above, actual events or results, the ultimate business or activities of Hashdex and its investment vehicles or the actual performance of Hashdex, its investment vehicles, or digital tokens may differ materially from those reflected or contemplated in such forward-looking statements. As a result, investors should not rely on such forward- looking statements in making their investment decisions. None of the information contained herein has been filed with the U.S. Securities and Exchange Commission or any other governmental or self-regulatory authority. No governmental authority has opined on the merits of Hashdex’s investment vehicles or the adequacy of the information contained herein.


Logo Hashdex
The material contained on this website is for informational purposes only and Hashdex, and its affiliates, is not soliciting any action based upon such material. The material is not to be construed as investment advice nor is it to be construed as recommendation, offer or solicitation to buy or sell any financial instrument or product or to adopt any investment strategy. Further, the material contained on this website does not constitute a representation that the financial instruments described therein are suitable or appropriate for any person. Past performance is not an indication of any future performance. This website may contain advertising of financial products.