What Can We Expect from Altcoins After the Bitcoin Halving?

The Bitcoin halving, which is scheduled for April 20, is expected to have a significant impact on altcoins. In previous halvings, Bitcoin’s influence in the market usually decreased in the months following the event. This decline in Bitcoin’s market control often resulted in more investment flowing into other cryptocurrencies, leading to new all-time highs in 2024. These altcoins are now poised to surpass their previous peaks after the upcoming halving. Let’s take a closer look at what might happen to these altcoins in the aftermath of the Bitcoin halving.

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It is common for altcoins to experience a surge in value and increased market volatility as Bitcoin’s price rises after a halving. This rise in Bitcoin’s price often motivates investors to shift their focus and investments towards altcoins. Looking back at previous halvings, particularly the second and third ones, there is a noticeable shift in market performance where altcoins tend to outperform Bitcoin. In the six to twelve months after a halving, as Bitcoin’s price stabilizes at new highs and potentially increases further, interest in the market typically shifts towards altcoins.

This shift, combined with Bitcoin’s historical decrease in dominance after a halving, often triggers a surge in altcoins, marking a period of peak performance for the altcoin market following the Bitcoin halving.

If the computing power used in Bitcoin mining increases, the mining difficulty will also rise to maintain balance, making it more challenging to mine Bitcoin. As a result, miners may need to reassess the profitability of their operations. This could lead to a shift in investment from Bitcoin to altcoins. Miners may diversify their investments as it becomes easier to make a profit after a difficulty adjustment, or they may seek higher returns by allocating their resources to the altcoin market. This increased demand for altcoins following the halving event can drive up their prices in the subsequent months.

Looking at the performance of altcoins after the last three Bitcoin halvings, there has been a significant decrease in Bitcoin’s market dominance, while the market capitalization of altcoins has surged in the months following the adjustment of mining difficulty.

For instance, after the second halving on July 9, 2016, Bitcoin’s share of the total cryptocurrency market dropped from 98.33% to below 40% within 18 months. During the same period, the value of altcoins increased by over $286.5 billion.

A similar trend was observed after the third halving on May 11, 2020. Within a year following this halving, Bitcoin’s share of the total market value decreased from 66.43% to 40%. Meanwhile, the market capitalization of altcoins skyrocketed from $90.11 billion to $1.229 trillion.

As of April 12, 2024, the market capitalization of altcoins stands at $1.13 trillion, with the Bitcoin halving just around the corner. We are currently in a pre-halving phase similar to what was seen in 2016 and 2020, which led to increases in the altcoin market cap following the Bitcoin halving. Considering that the effects of the halving on altcoins have lasted for more than a year in the past, it is possible that we will witness similar growth in the altcoin market once again, pushing the market cap above $3 trillion by 2025.

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Altcoins
Bitcoin
Bitcoin Halving
Cryptocurrency