With any cryptocurrency, it can be dicey trying to predict the next four weeks, let alone the next four months or the next four years. But with Bitcoin (BTC +1.27%), it's different.
That's because Bitcoin tends to follow a regular four-year cycle, punctuated by periods of extreme boom and extreme bust. For more than a decade, this cycle has largely held steady, so it's theoretically possible to predict where Bitcoin might be four years from now. Let's take a closer look at what that might mean for Bitcoin's price in 2029.
The Bitcoin four-year cycle
Every four years, Bitcoin undergoes a halving event, in which the rate of new supply of Bitcoin is cut in half. This introduces new scarcity into the market for Bitcoin, and generally tends to lead to a sizzling bull market rally that lasts anywhere from 12 to 18 months.
At the end of that time period, the price of Bitcoin collapses, only to be followed by a period of gradual recovery leading up to the next halving event. This phenomenon has been well-documented, and is part of the lore surrounding Bitcoin.
Image source: Getty Images.
Investment firm 21Shares recently documented the highs and lows of this four-year cycle, and it's certainly eye-opening. After the November 2012 halving event, Bitcoin skyrocketed in price from $12 to $1,150, before promptly losing 85% of its value. After the July 2016 halving, Bitcoin skyrocketed in price from $650 to $20,000 before losing 80% of its value. And after the May 2020 halving, Bitcoin skyrocketed in price from $700 to $69,000 before losing 75% of its value.
See what I mean? Periods of extreme boom are followed by periods of extreme bust. And, along the way, there's plenty of volatility. Until recently, Bitcoin had been prone to huge price swings to the upside and downside.
Does the four-year cycle still exist?
And that brings us to today. After the April 2024 halving, Bitcoin went on another stunning rally, eventually trading as high as $126,000 in October of this year.
CRYPTO: BTC
Key Data Points
If you're a hardcore Bitcoin historian, then it's easy to see the writing on the wall. It's now been more than 18 months since the April 2024 halving, and the "boom" part of the cycle for Bitcoin should be coming to an end soon. That's why Bitcoin's recent precipitous fall to the $100,000 price level is so nerve-wracking. It's hard not to think about three previous halving cycles, when Bitcoin lost anywhere from 75% to 85% of its value.
Bitcoin bulls, though, now say that the four-year cycle has been broken. They're convinced that Bitcoin is not going to experience another spectacular fall from grace, and that all the problems that have bedeviled Bitcoin in the past have now been fixed.
For one, a tsunami of long-term institutional money has flooded into the market, giving Bitcoin a much more solid base of support. In theory, speculative retail traders are being pushed out, and are being replaced by patient buy-and-hold money. That should reduce some of the selling pressure on Bitcoin.
Moreover, the Trump administration has taken such a staunch pro-Bitcoin stance that it's hard to see any reversal of these policies within the next few years. President Donald Trump and his family are now investing in Bitcoin via a variety of companies and crypto projects, so it's hard to see how the bottom could ever fall out of the Bitcoin rally.
If all goes according to plan, Bitcoin will grind its way to a future price of $1 million within the next four years. This has become the new conventional wisdom. Wall Street investors think Bitcoin is going to $1 million. Silicon Valley entrepreneurs think Bitcoin is going to $1 million. And White House insiders think Bitcoin is going to $1 million. Could all of them really be wrong?
Buy and hold for at least four years
Four years from now, we're likely to be in another Bitcoin bull market. That's because the next Bitcoin halving event is now tentatively scheduled for March 2028. Assuming that the post-halving rally will extend anywhere from 12 to 18 months, Bitcoin should be bulldozing its way to another all-time high in 2029.
But that doesn't mean its trajectory from now until then will be straight up. If history is any guide, Bitcoin will once again collapse in value before quickly recovering.
For that reason, if you're thinking about buying Bitcoin now, you need to be buying for the long haul. Your investment time horizon should not be four months -- it should be four years. That's the only way to ensure that a big Bitcoin investment today will actually pay off later.
