The real bull market comes after the halving: Review of Bitcoin price changes before and after the halving

Since the birth of Bitcoin, its unique economic model and fixed supply mechanism have always been the focus of market attention. As an important event in the Bitcoin ecosystem, the fluctuation of Bitcoin prices before and after the halving event has triggered extensive research and discussion. Looking back at the halving events, it is not difficult to find that the performance of Bitcoin prices has shown certain rules, which also provides a valuable reference for our investment decisions.

Price changes after halvings

The first halving: November 28, 2012

In November 2012, Bitcoin ushered in its first halving. Starting from November 2011, a year before the halving, the price of Bitcoin showed an upward trend. After the halving, the price of Bitcoin soared all the way, and finally reached a historical high of $1,200 in November 2013.

During this cycle, the price of Bitcoin increased fourfold before the halving, and increased nearly 100 times after the halving, reaching a peak of $1,200. The overall price increased by 350-400 times during the entire cycle, fully demonstrating the huge impact of the halving mechanism on the market. However, what followed was a 14-month deep bear market, which also made investors realize the cruelty of the market. The price of Bitcoin once fell by more than 80%.

The second halving of Bitcoin: July 10, 2016

In July 2016, the second halving of Bitcoin came as scheduled. Similar to the first halving, the market began to hype before the halving. The price of Bitcoin has been rising steadily since November 2015, and it has tripled to $650 before the halving.

After the halving, after about 3 months of correction and consolidation, the price of Bitcoin showed a parabolic rise, and finally reached a record high of $19,000 in December 2017. The entire cycle before and after the halving rose by about 80-90 times.

However, similar to the market performance after the first halving, the peak was followed by a 12-month deep bear, and the price fell by more than 80% again.

The third halving of Bitcoin: May 12, 2020

Before the halving, Bitcoin began to rise from $7,000 in November 2019. Four months later, the outbreak of the new crown caused a "3.12 crash". At the time of the halving, Bitcoin was about $10,000. After consolidating for about 2 months, as the Federal Reserve launched quantitative easing, the price of the currency began to rise all the way, reaching a high of $69,000 in November 2021. Subsequently, Bitcoin began to enter a deep bear market, falling to a minimum of $15,000, a drop of about 75%.

Summary of the characteristics and rules of previous halvings

Comprehensively reviewing the previous halving events, we can find some common characteristics:

First, the market began to hype about half a year before the halving, but the increase was relatively slow, with a periodic high point, but it would not break the historical high.

Second, before and after the halving officially occurs, the market often experiences a correction or consolidation, which is a normal performance of the market digesting the impact of the halving and adjusting price expectations. About 2-3 months after the halving, the power of the halving began to show, and the market started to rise again.

Finally, the increase after the halving is greater, which reflects the market's optimistic expectations for the future value of Bitcoin. As the parabolic acceleration reaches a climax, it directly sets a new high. But the increase in each halving is decreasing because the market value is getting bigger and bigger.

Price reaction before and after Bitcoin halving in 2024

On April 20, 2024, Bitcoin will usher in the fourth halving. We can find that, as in the historical law, the price began to rise six months in advance, that is, in October 2023. However, the difference is that this time, due to the narrative of Bitcoin spot ETF, the price directly hit a new high in March.

If this round is roughly similar to the historical cycle, it may still take several months for the price to react after this halving. Although there may be price fluctuations in the short term, in the long run, Bitcoin's deflationary characteristics and limited supply make it an attractive asset, and Bitcoin will still experience a significant bull market.

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