Making Money Using Bitcoin Halving Cycles

As we have now finished a crazy 2020 year and enter 2021, one major event quietly entering the news cycle is Bitcoin. As bitcoin has skyrocketed to a recent high of $42,000 (as of 01/08/2020), many may be wondering if, when, and why you should invest in bitcoin. As a simple math minded guy, I love doing basic math with Excel spreadsheets and bitcoin is perfect for doing basic math since all of its information is public. I’ll be doing this basic math as I review of the history of the halving cycle and make projections for it’s future price based on the current halving cycle.

First off, what’s bitcoin? Bitcoin is the predominant cryptocurrency that was developed after the last financial crisis in 2008 by “Satoshi Nakamoto” (that’s in quotes because no one knows who that person(s) is.) in an attempt to create a decentralized currency that was not controlled by any entity. As transactions happen, a public ledger is produced and a group of “miners” shares the ledger to keep track of all bitcoins and makes sure the books are not cooked. As a “reward”, miners “mine” blocks which are stored on a blockchain and receive bitcoins for their work. The total number of bitcoins that will ever exist is 21 million.

What’s a halving cycle? Bitcoin halving cycles happen roughly every four years. Basically, a halving is when the bitcoin reward for mining blocks is cut in half. Thus far, there have been three bitcoin halvings in 2012, 2016, and 2020. Here is a chart of the past halving cycles courtesy of Hackermoon.com