As the crypto community moves beyond Donald Trump’s appearance at the Nashville Bitcoin conference, they are likely to note that July 29 marks the 100th day since Bitcoin underwent its fourth mining reward halving. Research from a blockchain analysis firm indicates that the positive effects of the reduced bitcoin (BTC) supply expansion usually become apparent after 100 days. Currently, BTC/USDT hovers at $69,000, slightly down after peaking at the renowned resistance level of $70,000.
Bitcoin’s mining reward halving is a pre-programmed event that occurs every four years or after 210,000 blocks are mined. This event halves the reward that miners receive for validating transactions, thereby controlling Bitcoin’s supply growth and ensuring its scarcity over time. Unlike fiat currencies that experience ongoing inflation, Bitcoin’s total supply is capped at 21 million, and halving events regulate the pace at which this cap is approached.
BTC Price and Halving
The initial halving in 2012 cut the per-block reward for miners from 50 BTC to 25 BTC. Subsequent halvings reduced this reward further, with the latest halving on April 20 decreasing it to 3.125 BTC per block. Historically, these halvings have preceded significant price rallies, with most gains occurring after the first 100 days.
An analyst from a prominent trading firm explained on X that the market’s short memory means the supply deficit caused by the halving should start to have an impact around now. This conclusion came after analyzing performance data from the previous three halvings in 2012, 2016, and 2020.
The research demonstrated that the average excess performance – the difference between performance X number of days after the halving and X days before the halving – increases markedly 100 days post-halving and becomes statistically significant. The T-value is a statistical measure used to determine the extent to which the sample mean differs from the population mean, adjusted for sample variability.
The key takeaway, according to the analyst, is that 100 days after a halving, the performance difference is statistically significant and continues to increase until approximately 400 days post-halving. Whether this pattern will hold true this time remains to be seen.
Halving and Previous Price Action
Bitcoin halving is a pre-programmed event that reduces the reward given to miners for validating transactions on the Bitcoin network by 50%. This key mileston happens roughly speaking every four years or after 210,000 blocks have been mined. The purpose of halving is to control the issuance of new bitcoins and gradually reduce the rate at which new bitcoins are introduced into the circulating supply. This deflationary mechanism ensures that Bitcoin becomes increasingly scarce over time, contrasting with fiat currencies that can be printed in unlimited quantities by central banks.
The first Bitcoin halving occurred in November 2012, cutting the mining reward from 50 BTC per block to 25 BTC. Following this event, Bitcoin’s price experienced a dramatic increase, rising from around $12 to over $1,100 within a year. This significant price surge was attributed to the reduced supply of new bitcoins entering the market, combined with growing interest and adoption of Bitcoin as a digital asset.
The second halving took place in July 2016, further reducing the block reward from 25 BTC to 12.5 BTC. In the months following this halving, Bitcoin’s price gradually climbed from approximately $650 to nearly $20,000 by December 2017. This period saw a massive influx of new investors and heightened media attention, driving demand and pushing prices to unprecedented levels. The halving-induced supply reduction played a crucial role in this price appreciation, as fewer new bitcoins were available to meet the increasing demand.
The most recent halving occurred in May 2020, lowering the block reward from 12.5 BTC to 6.25 BTC. In the year following this event, Bitcoin’s price surged from around $8,500 to an all-time high of over $64,000 in April 2021. This extraordinary price rally was fueled by a combination of factors, including increased institutional investment, growing acceptance of Bitcoin as a hedge against inflation, and the ongoing reduction in new supply due to the halving. The halving’s impact on price has been consistent across all three events, demonstrating the powerful effect of Bitcoin’s built-in scarcity mechanism on its market value.
BTC Price Prediction
So, predicting the future price of Bitcoin involves numerous variables, including market trends, regulatory developments, and technological advancements. Analysts have various projections for Bitcoin’s price by the end of 2025, influenced by factors such as institutional adoption, regulatory clarity, and the impact of the next Bitcoin halving event scheduled for 2024.
Many experts agree that Bitcoin could see substantial growth. According to one crypto publication, Bitcoin’s price could reach an average of $110,636 by the end of 2025, with potential highs as significant as $254,687 if it follows the growth patterns of major tech companies like Google and Facebook. This optimism is fueled by the increasing interest and investment from institutional players and the anticipated positive effects of Bitcoin ETFs and regulatory advancements​​.
Another perspective suggests that Bitcoin might hit around $101,000 by the end of 2025. This prediction considers the compounded effects of the 2024 halving and continued institutional adoption, which are expected to drive the price into six-figure territory before potentially stabilizing below $100,000​​.
One BTC price prediction platform also provides a bullish outlook, suggesting that Bitcoin could reach $250,000 by 2025, driven largely by inflows into Bitcoin ETFs and strong market sentiment post-halving. The stock-to-flow (S2F) model, which has been a reliable predictor for Bitcoin, aligns with this optimistic view, projecting significant price increases following the halving events​.
Overall, while predictions vary, the consensus among analysts points towards significant growth for Bitcoin by the end of 2025, with prices potentially surpassing $100,000, driven by institutional investment, regulatory developments, and the halving event’s impact. However, as with all financial forecasts, these predictions come with inherent uncertainties and should be viewed with a grain of salt.
