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%) |
Brackets show ETH performance relative to the BTC price at the time of each respective halving.
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.