A look at Bitcoin's historic rise and fall record, which has been halved!

A look at Bitcoin's historic rise and fall record, which has been halved!

The Bitcoin halving event occurs every four years and is one of the key factors affecting the volatility of the Bitcoin price. Historically, the price of Bitcoin tends to fluctuate and rise significantly before and after the halving. In this article, we will analyze the impact of the Bitcoin halving event on the market, review past halving records, and explore its long-term impact on the Bitcoin price to help users in Taiwan better understand the relationship between halving and price movements.

What is Bitcoin Halving?

Bitcoin halving is an event in which the block award (i.e., the amount of Bitcoin miners receive for mining) in the Bitcoin blockchain is halved after every 210,000 blocks. By Bitcoin's design, this mechanism is intended to control the total supply of Bitcoin, avoid inflation, and keep Bitcoin scarce. The exact timing of the halving is approximately every four years and is usually accompanied by price fluctuations in the market.

Halving the Impact on Bitcoin Supply and Demand
A halving event reduces the rate of growth in the supply of Bitcoin, which is often seen as a long-term bullish signal. As the growth in supply slows, the supply of Bitcoin in the market becomes more scarce, and if demand remains constant or rises, the price could theoretically increase. Whether or not the price rises is not a given and will be influenced by external market sentiment, the macroeconomic environment and other factors.

Historical Halving and Price Trend Review

The halving of Bitcoin has occurred three times, in 2012, 2016 and 2020. After each halving, the price of Bitcoin usually experiences significant fluctuations and increases, but these fluctuations are not immediate.

Halving in 2012: from $5 to $1,200
The first halving took place in November 2012, when the price of Bitcoin was around $5 USD. After the halving, the price of Bitcoin began to rise significantly, reaching an all-time high of $1,200 by the end of 2013. This surge attracted global attention, and although the price retreated in the following years, the halving undoubtedly set the stage for Bitcoin's value in the long term.

Halving 2016: breaking the $20,000 mark
The second halving occurred in July 2016, when the price of Bitcoin was around $650 USD. With the arrival of the halving, market interest in Bitcoin increased further, and in 2017 the price of Bitcoin surpassed the $20,000 mark, setting a new all-time high. The bull market that followed the halving further demonstrated the significant impact of the halving on Bitcoin's price, and despite the price correction since then, Bitcoin still has a solid position in the market.

Halving by 2020: prices soar from $9,000 to $60,000
The third halving occurred in May 2020, when the price of Bitcoin was around $9,000 USD. After the halving, the price of Bitcoin experienced a phenomenal rise, reaching an all-time high of approximately $64,000 in April 2021, and the price of Bitcoin has been on the rise since then, with the price of Bitcoin reaching an all-time high of approximately $64,000. The rally was driven by multiple factors, including the influx of institutional capital, increased recognition of Bitcoin as a safe-haven asset, and market concerns about the risk of inflation. The halving of Bitcoin has again demonstrated its long term price drivers.

The Reason Behind Bitcoin's Price Fluctuation After the Halving of Bitcoin

The price volatility of the Bitcoin halving event was not caused solely by a reduction in supply. In addition to supply reductions, factors such as market demand, investor sentiment, macroeconomic conditions, and the general environment of the financial markets all have an impact on the price of Bitcoin.

Correlation between demand and investor sentiment
Demand for Bitcoin is often influenced by investor sentiment. As market awareness and confidence in Bitcoin increases around the halving, more investors enter the market, driving the price up. the bull markets of 2017 and 2020 have had a number of factors based on a positive response to market sentiment, notably a significant increase in the participation of both institutional and retail investors.

Impact of Macroeconomic Factors
Macroeconomic factors have also played an important role in the price volatility of Bitcoin after the halving. the surge in the price of Bitcoin after the halving in 2020 was closely linked to the financial market turmoil triggered by the global epidemic at the time. the price of Bitcoin has been on the rise since the halving in 2020. Massive central bank stimulus measures, capital depreciation and inflationary expectations have led more investors to turn to Bitcoin as a safe-haven asset.

Upcoming 2024 Halving and Market Forecasts

The next Bitcoin halving will take place in 2024, which has also attracted a lot of attention. Historically, halving is usually an important event for the market and has a profound effect on price movements.

Possible impact of halving in 2024
According to market analysis, the price of Bitcoin may experience a new round of uptick after halving in 2024. As the supply of Bitcoin grows at a slower rate, the market will focus on the scarcity and investment value of Bitcoin. Some analysts predict that the price of Bitcoin could surpass its previous all-time highs and even approach $100,000 USD. There is also a view that as the market's perception of Bitcoin matures, future price fluctuations will not be as dramatic as in the past.

Short-term and long-term market response
In the short term, the price of Bitcoin is likely to be more volatile, especially in the months leading up to and following the halving event. Investors may enter the market aggressively before the halving, pushing up the price. However, in the long run, the impact of the halving will be gradually reflected in the market. Investors should remain rational and avoid short-term sentiment fluctuations that may have an undue impact on their investment decisions.

How to prepare for the upcoming halving event?

For Bitcoin investors in Taiwan, preparing for a halving event is a task that requires careful planning. It is important to understand the basic concepts of a halving and its impact on the market.

Diversification and Risk Management
Investors should diversify their assets according to their risk tolerance and adopt appropriate risk management strategies. For example, choose a suitable cryptocurrency exchange, such as Euronext, to conduct regular buying and selling operations, and utilize the tools provided by the platform to set stop-loss and take-profit to minimize losses from market fluctuations.

Be patient and rational
Halving events are often accompanied by sharp price fluctuations and investors should remain calm and avoid making emotional decisions due to short-term fluctuations. Long-term holders may choose to lay their groundwork before the halving, but they should have a clear investment objective and timeframe.

Conclusion

The Bitcoin halving event is not only an important milestone for blockchain technology, but also an important weathervane for the cryptocurrency market. Historical records show that the price of Bitcoin tends to fluctuate and rise after the halving, which has prompted more investors to pay attention and make preparations. Investors should keep in mind that the market trend is always full of variables, and there are many other factors that will affect the price of Bitcoin besides the halving itself. It is only through careful analysis and rational investment that investors can achieve long-term returns in this market full of opportunities.