Bitcoin is approaching a major technical event in April 2024 known as “halving.” Many investors expect this closely watched event to be a catalyst for price rallies since the cryptocurrency has been programmed to cut the supply of new bitcoin created and awarded to miners by 50% roughly every four years. Following the previous three halvings in 2012, 2016 and 2020, the coin saw triple-digit percentage gains or more by the end of the following year, according to data provided by CCData . The chart below shows bitcoin price returns in the days following a halving event. However, the data also shows that bitcoin’s post-halving performance has been mixed in the short term. In the two months following historical halvings, bitcoin returns averaged around 16% — not a significant gain relative to the crypto’s volatility throughout the year. After the first halving on Nov. 28, 2012, bitcoin rallied by nearly 45%. But after the second halving on July 9, 2016, prices were lower by 5.5%, data from CCData shows. “Historical data shows that bitcoin has typically experienced significant price breakouts and high returns following halving events,” Jacob Joseph, research analyst at CCData, told CNBC Pro . “However, this trend is not guaranteed, as demonstrated during the second bitcoin halving cycle, when prices remained subdued for about three months.” On a relative basis, bitcoin also underperformed its rival cryptocurrency, ethereum, following the 2016 and 2020 events, according to research by Citi. This suggests that outperformance compared to overall market gains has been challenging to predict around halvings. BTC.CM= YTD line The Wall Street bank also found a similarly mixed picture for Litecoin, another cryptocurrency with halving events similar to bitcoin’s. Following Litecoin’s last three halvings in 2015, 2019 and 2023, the coin either tracked historical returns or significantly underperformed them. “When determining whether halvings have any bearing on returns, Litecoin provides a relevant event study given its similar age and supply-control mechanism to bitcoin’s,” wrote Citi analysts led by Alex Saunders in a note to clients on Dec. 18. “Along with BTC’s previous halvings, history shows that outperformance versus unconditional returns, and versus other coins, has been hard to come by.” That indicates that a reduction in supply doesn’t necessarily drive up the price for crypto since the demand has been variable. Citi does caution that its research is meant for information purposes only and does not cast a view on the future or current state of cryptocurrency or bitcoin. Positive catalysts for 2024 Several positive catalysts in 2024 could improve the chances of a post-halving breakout this time. The possibility of a bitcoin spot exchange-traded fund being approved in the U.S. could improve the demand outlook for bitcoin, according to Citi. In November, the price of bitcoin hit an 18-month high after BlackRock took its first steps toward an ether ETF. Other asset management firms, including WisdomTree and Valkyrie, await the Securities and Exchange Commission’s approval to issue a spot bitcoin ETF. Citi believes an ETF product will enable a potential investor base that does not wish to deal with the custody and storage issues of a physical holding to invest in the crypto. In addition, since bitcoin, like gold, does not yield anything, falling interest rates globally could also be viewed as a positive event. The Federal Reserve hinted in its December meeting that there could be rate cuts in 2024. Finally, even the U.S. presidential election could prove to be a catalyst, since further regulations are unlikely to be introduced — which means “there is a strong likelihood of witnessing another bullish halving event in April of next year,” according to CCData’s Joseph. — CNBC’s Michael Bloom contributed to this report.