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Table of Contents
1. The core impact of halving: fundamental changes in supply and demand relationships
2. Historical Law: Half is often accompanied by bull market
3. Indirect impact of miner behavior on price
4. Expectations and speculation: early overdraft and short-term fluctuations
Summary: Half is the "catalyst" of price, not the direct determinant
Home web3.0 What is the relationship between Bitcoin halving and Bitcoin price?

What is the relationship between Bitcoin halving and Bitcoin price?

Jul 29, 2025 pm 01:57 PM
Blockchain Bitcoin currency circle miner

Bitcoin halving directly reduces new supply by reducing block rewards, strengthens scarcity, forms expectations of supply and demand imbalance, and drives price rise; 2. Historical data shows that there is a significant bull market in 1 to 2 years after each halving, with an increase of more than 95 times, 30 times and 7 times respectively, strengthening the market consensus of "halving = prelude to the bull market"; 3. Half leads to halving miners' returns, and some high-cost miners withdraw, which may reduce market selling pressure in the short term, and in the long term, rely on price increases or efficiency improvement to maintain stability in computing power; 4. The market often speculates on the halving expectation 6-12 months in advance, which triggers the phenomenon of "buy expectations and sell facts". A short-term pullback may occur after the halving, but the long-term trend is still dominated by the fundamentals of supply and demand; Bitcoin halving is an important catalyst for price, but not the only determinant factor. Its impact needs to be comprehensively judged in combination with the macro economy, regulatory environment and capital flows, and we must be wary of the short-term volatility risks brought by expected overdrafts.

What is the relationship between Bitcoin halving and Bitcoin price? - php Chinese

There is a close and complex relationship between Bitcoin halving and Bitcoin price. This relationship is based on economic principles and is also affected by multiple factors such as market expectations and historical laws. The specific relationship can be understood from the following aspects:

1. The core impact of halving: fundamental changes in supply and demand relationships

Bitcoin halving is the mechanism set by its underlying code - for every 210,000 blocks (about 4 years) generated, the miner's block reward will be halved. For example, the initial reward of 50 bitcoins in 2009 was 25 after the first halving in 2012, the second halving in 2016 was 12.5, the third halving in 2020 was 6.25, and the next halving (expected in 2024) will drop to 3.125.
  • The supply side contraction: the halving directly leads to the halving of Bitcoin's "new issuance". Taking the third halving as an example, Bitcoin’s annual inflation rate was about 3.6% before the halving, and fell to 1.8% after the halving, which was about 2% lower than the annual inflation rate of gold, making its "scarcity" further highlighted (the total amount of Bitcoin is fixed at 21 million, and about 19 million have been dug out at present).
  • Expectations of imbalance in supply and demand: According to the basic principles of economics, prices tend to rise when supply decreases while demand remains unchanged or increases. The market will expect supply contraction in advance until after halving, thereby promoting early entry of funds, forming a "up before halving".

2. Historical Law: Half is often accompanied by bull market

Looking back at the market performance after the first three halvings, Bitcoin prices have seen significant increases after the halving (although time periods vary):
  • The first halving in November 2012: The price of Bitcoin was about USD 12 before the halving, and rose to USD 1,163 about one year after the halving (the increase was more than 95 times).
  • The second halving in July 2016: The price before the halving was about US$650, and rose to US$20,000 in about two years after the halving (the increase was more than 30 times).
  • The third halving in May 2020: The price before the halving was about US$8,600, and rose to US$69,000 in about one and a half years after the halving (the increase was more than 7 times).
    This law strengthens the market's consensus on "halving = prelude to the bull market" and forms self-realization expectations - the more investors believe that the price will rise after the halving, the more inclined to buy in advance, driving the price to rise.

3. Indirect impact of miner behavior on price

Half leads to a direct halving of miners' unit income, which poses a test on miners' cost and survival mode:
  • Short-term pressure: If the price of Bitcoin does not rise simultaneously, some miners with lower computing power and higher cost will be forced to withdraw due to losses, resulting in a decline in computing power across the entire network (computing power reflects the degree of competition among mining). But surviving miners may reduce Bitcoin selling (need to cover costs such as electricity bills), indirectly reduce market supply, and support prices.
  • Long-term adaptation: After the halving, miners need to maintain profits through efficiency improvements (such as upgrading mining machines) or price increases. If the price rises, it will attract new miners to enter the market, and the computing power will rebound, forming a positive cycle of "price-computing power".

4. Expectations and speculation: early overdraft and short-term fluctuations

The market's response to halving is often "foresight":
  • Early rise: Since the halving time can be accurately predicted (based on blockchain algorithms), funds usually start speculating on expectations 6-12 months in advance, driving prices to rise a round of ups before the halving (for example, before the 2020 halving, Bitcoin rose from its 2019 low of $3,000 to $8,600).
  • "Buy expectations and sell facts": Some investors will take profit after the halving is implemented, resulting in a pullback in the short term after the halving (for example, Bitcoin fell from $9,000 to around $7,000 in 2020), but it is still driven by supply and demand logic in the long run.

Summary: Half is the "catalyst" of price, not the direct determinant

Bitcoin halving itself does not directly "determine" price increases, but it has become an important catalyst for long-term price rise through chains such as shrinking supply, strengthening scarcity, affecting miner behavior, and triggering market expectations. Historical laws show that after halving, prices often usher in a bull market within 1-2 years, but the specific increase is also affected by factors such as macroeconomics (such as interest rates, inflation), regulatory policies, and institutional funds entry. Therefore, halving is an important "cyclical event" in the currency circle, but we must be wary of the risk of fluctuations after short-term speculation.

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