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Comparing Post-Halving Performance

After reaching its all-time high of 109,000 dollars in January, the leading cryptocurrency bitcoin is currently consolidating at the $97,000 level. Although the possibility of a technical correction lingers in the air, the halving cycle is not over yet. [Assessing Halving Cycles] When looking at bitcoin's halving of 2020 and its subsequent spot price peak, the asset climbed a total of 686 percent between 11th of May 2020, and 8th of November 2021. Between the latest halving on 20th April of 2024 and the recent ATH, bitcoin only ascended 63%. Although bitcoin's power-law model and law of diminishing returns suggest a more moderate future price performance, the 63 percent appreciation mirrors an unfinished halving cycle, with a plenty of upside. [MSTR as a Leading Indicator] Strategy (MSTR, former MicroStrategy) has continued its purchase program in early 2025, recently adding 7633 bitcoins to its balance sheet, and now holding a total of 478,740 units. MSTR's purchase program mirrors institutional demand and acts as a leading indicator to the underlying asset (bitcoin) itself. Strategy's buys are usually pro-cyclical, and consequently more purchases signal a positive spot price trajectory. Vice versa, a potential lack of MSTR's purchases would signal a weaker market. [Looking Forward] So, what to expect in the short-term future? Despite the continuing halving cycle, I'd expect to see a sell in May effect, a sideways summer, and elevated price levels by the last quarter. The positive Q4 seasonality has been repeated in 2013, 2016, 2017, 2020, 2021, 2023, and 2024. A deeper correction could be multiple months or even a year away. Macro-level events, like an armistice in Ukraine, could significantly uplift risk-on assets, including bitcoin.

Comparing Post-Halving Performance

After reaching its all-time high of $109,000 in January, bitcoin is currently undergoing consolidation at the $97,000 level. While the possibility of a technical correction still remains, the halving cycle is not over yet.

Assessing Halving Cycles

Looking at bitcoin's spot price peak after the 2020 halving, it rose a total of 686% from May 11, 2020, to November 8, 2021. In contrast, bitcoin has only risen 63% from the most recent halving on April 20, 2024, to the recent all-time high.

While bitcoin's power-law model and law of diminishing returns suggest more moderate price increases in the future, this 63% rise indicates that the halving cycle is not yet complete and suggests there is plenty of room for additional growth.

MSTR as a Leading Indicator

Strategy (MSTR, formerly MicroStrategy) has continued to purchase bitcoin in early 2025, recently adding 7,633 BTC to bring its total holdings to 478,740 BTC. MSTR's purchasing program reflects institutional demand and serves as a leading indicator for bitcoin itself.

MSTR's purchases are typically pro-cyclical, so additional purchases signal a high likelihood of spot price increases. Conversely, if MSTR stops making additional purchases, it could indicate a potential market weakness.

Looking Forward

So what trends can we expect in the short term? Despite the ongoing halving cycle, I expect to see a "Sell in May" effect, sideways movement during summer, and higher price levels in the fourth quarter. This positive Q4 seasonality has repeatedly occurred in 2013, 2016, 2017, 2020, 2021, 2023, and 2024.

A deeper correction might occur months or even a year from now. Additionally, macro-economic events such as a ceasefire in Ukraine could significantly boost the price of risk-on assets like bitcoin.