Bitcoin is a unique phenomenon that follows its own economic logic. Since its creation in 2009, it has undergone four halvings. They occurred in November 2012, July 2016, May 2020, and April 2024. According to TradingView data, it is a key event that has a long-term impact on the price of this most well-known cryptocurrency.

Bitcoin as a phenomenon of cyclical growth

Halving means that the reward miners receive for confirming transactions is reduced by half. It is a process that slows the rate at which new Bitcoins enter circulation. This mechanism was designed by creator Satoshi Nakamoto to maintain the scarcity of the currency and protect it against inflation.

The positive effect of halving on price is the result of a simple economic principle. A slowdown in supply growth with stable or increasing demand leads to a rise in value. Each halving creates a period of increased investor activity, anticipating price growth.

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Btc and the diminishing impact of halving

A closer analysis of historical data shows that each growth cycle around halving is almost identical in length. Interestingly, Bitcoin has always risen for the same period before and after the halving. In other words, the halving always occurred in the middle of each growth cycle.

The first cycle lasted approximately 730 days, but since 2016, all subsequent cycles, including the current one, have extended to about 1,066 days. According to this theory, the peak of the current cycle should be happening right now.

However, there are limits. While halving increases BTC price, its impact gradually decreases. The block reward always drops by 50%, but the absolute value of the decrease is getting smaller. While the first halving in 2012 reduced the reward from 50 to 25 BTC, in 2024 it only decreased from 6.25 to 3.125 BTC. The difference between a 25 BTC drop and a 3 BTC drop is significant.

While the first cycle yielded an increase of up to 59,800%, the second achieved 10,700%, the third 2,000%, and the current one is approximately 700%. Bitcoin may repeat its growth pattern, but the effect diminishes with each cycle. It shows that while halving remains an important market driver, its ability to dramatically affect the price decreases over time. This is a natural consequence of market maturity.