Original title: (Research on Bitcoin Value Trends: The Evolutionary Code of Value in Four Halvings)
Original authors: SanTiLi, Naxida, Legolas
Abstract:
This article will focus on the four halving events of Bitcoin from 2012 to 2024, systematically sorting out the Bitcoin halving mechanism, trends in inflation rates, and exploring their impact on price trends in conjunction with the market performance before and after each halving. Through historical data analysis and macro comparison, this article points out that Bitcoin has currently entered a phase where its inflation rate is lower than that of gold, its scarcity becoming increasingly prominent, gradually possessing long-term value logic to counter traditional assets. Meanwhile, from the cyclical rhythm of the four halvings, although the increase since the 2024 halving has been moderate, it is still in a momentum-building phase, and the actual window may gradually open between 2025 and 2026. The article concludes by discussing the core value foundation of Bitcoin, including scarcity, decentralized mechanisms, and deflationary models, noting that its logic as 'digital gold' is maturing.
I. Basic rewards and inflation rates of Bitcoin halving cycles:
Bitcoin was designed by Satoshi Nakamoto in 2009, with a total issuance fixed at 21 million coins. In the early days, miners could receive 50 BTC as a reward for successfully mining a block. This reward automatically halves approximately every 210,000 blocks (about four years), gradually reducing the amount of new issuance.
The halving cycle of BTC officially began in 2012, occurring every four years, with the 2024 halving resulting in each block rewarding 3.125 BTC, with an annual inflation of: 52560x3.125=164,250 coins, approximately 0.782% of the total. An inflation rate of around 0.78% is already lower than the annual inflation rates of most developed countries, and the inflation rate of gold mining expansion is approximately between 1.5%-2%. Currently, BTC has entered a phase where its inflation rate is lower than that of gold.
Fig.1 Bitcoin halving cycle rewards and inflation chart
As shown in the chart: When each block has a reward of 50, the annual increase is approximately: 52560x50=2,628,000 coins, about 12.5% of the total 21 million. As of 2025, when each block has a reward of 6.25, the annual increase is: 52560x6.25=328,500, about 1.564% of the total 21 million.
As of May 7, 2025, around 14:00, approximately 19,861,268 BTC have been mined, accounting for about 94.58%, with a total market capitalization of about $2 trillion ($2034,300,009,004). Compared to the last halving cycle in 2020, when about 18,385,031 BTC were mined (about 87.5% of the total), with a total market capitalization of about $161.8 billion, the total market capitalization has increased by about 1236% in about five years.
In the next four years, the annual inflation rate will only be 0.782%.
Fig.2 Comparison chart of inflation rates of major countries from 2019 to 2025
In 2019, China's inflation rate was about 2.9%, while the United States' inflation rate was 2.3%. At that time, due to the COVID-19 subsidies in 2020, we predicted that the significant issuance of dollars would likely cause a substantial increase in the inflation rate from 2020 to 2022. Indeed, the inflation rate in the U.S. rose to a high of 8%, which then gradually decreased due to the Federal Reserve's interest rate hike policy. By 2024, it had dropped to around 2.2%, while China's annual inflation was about 0.2%, indicating better control of inflation among major countries (2019–2024: data from official statistical agencies of various countries. 2025: data from the International Monetary Fund (IMF) report and updated forecast values). Most developed countries reported inflation rates around 2.5%, but the actual shopping experience and currency devaluation should be significantly greater than the statistical data.
At this time, this halving of Bitcoin will again halve the inflation rate of BTC, entering a new historically low inflation level of 0.782%. The decrease in the inflation rate is generally not a bad thing for any asset, as it increases scarcity. However, this does not necessarily mean that the value of the asset will rise 100% in a short time, but it is considered an important anti-devaluation factor.
II. Comparative analysis of market performance after four rounds of Bitcoin halving:
Since the inception of Bitcoin, each block reward halving has had a profound impact on the BTC market price. From 2012 to 2024, four halving events exhibited some relatively consistent cyclical characteristics. This article extracts some valuable references from detailed comparisons of market price trends before and after each halving. History never exactly repeats itself, but there are always similar patterns before peaks or near destruction.
Fig.3 Value change data chart of BTC during the four halving cycles
As shown in Fig. 3, data on the trends of BTC during the four halvings, the first half, and one year after halving is summarized, along with the highest points in the corresponding cycles. The chart shows that Bitcoin's price has significantly increased after each halving. Calculating from the closing price on the day of halving, the increase exceeded 8000% within one year after the 2012 halving, about 286% in 2016, approximately 475% in 2020, while the increase in the year following the 2024 halving has only been about 31% so far (with a maximum of 68.75% - $109,588).
1. Significant gains are generally observed six months prior to halving.
Looking back at the four halving events, Bitcoin usually begins to enter an upward channel about six months before the halving. For example:
· During the 2012 halving, the increase compared to six months prior was 141.03%
· The 2024 halving has seen an increase of 118.88% compared to six months ago.
This phase often corresponds to the market's gradual pricing of 'halving expectations,' possessing strong signal value for preparation.
2. The core explosion period is 6-12 months after halving, but it is not necessarily the peak.
Historical experience from three rounds indicates that the 6-12 months post-halving is the main upward wave phase for Bitcoin:
· 2012: One year later, an increase of 8181.51%
· 2016: One year later, an increase of 286.29%
· 2020: One year later, an increase of 475.64%
· 2024: Not yet a year has passed, temporarily at 31.18%, with a maximum of 68.75% ($100.9k)
Especially in 2012 and 2020, exhibiting a typical 'consolidation for half a year, then explosion' structure. One year later, it enters the peak explosion period, reaching a historical high at that stage. Currently, with the halving in 2024 just under a year ago, if history repeats, the real explosion window may open between 2025 and Q1 of 2026.
3. The movement in the first year after halving provides preliminary reference for trend judgment.
After the halving in 2024, Bitcoin rose by 10.02% within a month, but then experienced a two-month consolidation and correction, generally in a phase of building momentum. As of October 2024 (half a year after the halving), the price had only slightly increased by 6.30% relative to the halving day, far from entering the main upward phase. However, this is not uncommon in history, as both 2016 and 2020 officially started their market trends only half a year after the halving.
4. The peak of each bull market mainly occurs within 6-12 months after the halving.
Based on data from the first three rounds, the halving cycle relative to the closing price on the day of halving, the highest price, generally appears in the mid-term before the next halving:
· 2012: Highest increase of 9237.15%
· 2016: Increase of 2825.84%
· 2020: Increase of 700.28%
After this round of halving in 2024, a peak of $109,588 has already appeared, representing a 68.75% increase relative to the halving day, and has not yet entered the exponential explosion phase. This pattern applies only to this round, as after this round ends, if BTC reaches values as high as 300,000 to 500,000 or even 1,000,000, its valuation would be extraordinarily large. In the next halving, unless it references the devaluation of pegged assets or further expands application exploration, such as interstellar exploration, it will be difficult to see multiple growths again.
Chart summary:
The historical halving cycles of Bitcoin show a highly consistent three-phase rhythm:
Momentum build-up (6 months before halving) → Stable fluctuation (6 months after halving) → Main upward wave explosion (6-18 months after halving). Currently, it's been nearly a year since the 2024 halving, indicating that the market may still be accumulating energy for the later explosion. Coincidentally, similar to the eve of 2017, it was also during the initial period of Trump's presidency. At the same time, the Stock-to-Flow chart indirectly supports our viewpoint on the reference value still being in a thick accumulation phase: however, historical data and patterns only hold referential value; one should not blindly follow the data's guidance and must have sufficient self-judgment to research DYOR.
Fig.4 Bitcoin price Stock-to-flow chart
III. The long-term value scientific attributes of BTC:
The value of an asset derives from consensus and its intrinsic value, while long-term consensus must come from its inherent advancement, scientific attributes, and irreplaceable pioneering nature. Bitcoin (BTC) is not merely a crypto asset, but an innovative product at the intersection of technology, economics, mathematics, cryptography, and other disciplines. Its long-term value is not maintained solely by market speculation but is built on a comprehensive, rigorous, verifiable, and anti-manipulation system design.
1. Scarcity:
As mentioned earlier, the total supply of Bitcoin is fixed at 21 million coins, written into the protocol by Satoshi Nakamoto in the underlying code, and gradually released through the block reward halving mechanism. Halvings occur approximately every four years, with the final issuance expected around 2140. In contrast to fiat currencies' unlimited issuance mechanism, Bitcoin possesses a natural deflationary characteristic that supports its long-term appreciation logic from a supply and demand perspective.
Scarcity design is the core pillar of Bitcoin's anti-inflation, laying the foundation for it to become 'digital gold.'
2. Decentralization: Consensus mechanism ensures network neutrality
The Bitcoin network relies on a decentralized PoW (Proof of Work) consensus mechanism provided by computational power, where any node can verify transactions and participate in maintaining the ledger. This structure effectively avoids issues like centralized single points of failure, abuse of power, and control of systems found in traditional financial networks. The high degree of global decentralization also minimizes the risk of a 51% attack.
3. Deflationary model against fiat currency devaluation
As shown in Fig. 2, the deflationary issuance model built into Bitcoin sharply contrasts with the inflation structure of fiat currencies worldwide. Especially in the context of massive QE and currency flooding by global central banks since 2020, Bitcoin has gradually proven to be a hedge against fiat currency devaluation and asset bubble risks. BTC is gradually becoming a safe haven for global capital in the 'era of diminishing trust in fiat currencies.'
4. Technological attributes: Advanced cryptography + Peer-to-peer network design
Bitcoin integrates several cutting-edge technologies:
· Elliptic Curve Cryptography (ECDSA): Ensures account security and private key signing
· SHA-256 Hash Algorithm: Ensures data integrity
· Merkle tree structure: Efficient verification of transactions within blocks
· P2P (Peer-to-Peer) Network: Achieves global value transfer without intermediaries
The combination of these core technologies makes Bitcoin a highly robust, non-falsifiable value transfer network, while also possessing infinite extensibility, laying a solid foundation for subsequent second-layer expansions (such as the Lightning Network, ecological applications). BTC is not only an asset but also a masterpiece of cryptographic technology engineering. Future resistance to quantum updates is also worth looking forward to.
5. Challenger of global financial order: An alternative consensus asset amid changing trends in the dollar.
The current world is undergoing a de-dollarization wave: settlements between countries are beginning to shift towards local currencies, gold, and decentralized assets. Bitcoin, with its non-sovereign objectivity, globalization, and scarcity, has become an important channel for asset transfer and storage of value in emerging markets and turbulent countries. It has constructed a new financial order model that coexists but operates independently from the dollar and gold—the 'neutral system of consensus currency.' When 'the credit of certain countries' is hard to trust, relying on objective algorithmic credit will become a moat for international relations, of course, requiring further intervention from national regulatory bodies to prevent frequent illegal activities.
6. The potential financial infrastructure of interstellar civilization (currently not applied, belongs to personal exploratory views)
Bitcoin is currently the only value protocol that does not rely on any country, bank, or internet entity. Its ledger can exist on any node in the universe, requiring only electricity and computational power to maintain the network. This structure is naturally suitable for future space exploration scenarios, such as Mars or lunar exploration, facilitating quick and direct use and applications. However, as human exploration of outer space is still in its infancy, with no significant breakthroughs in stable landings and arrivals, this point is limited to personal imagination. But looking ahead to a 30-50 year cycle, preliminary planetary applications do not seem entirely impossible. Bitcoin (or similar credit points) could serve as the foundational token of human digital civilization.
Thus, the overall scientific attributes of BTC:
· Supply ceiling (scarcity) + Consensus strength (decentralization);
· Real-world context: Weakening fiat currency credit, expanding debt bubble;
· In the face of future uncertainties, Bitcoin's 'anchoring attribute' becomes increasingly prominent.
IV. Summary of BTC's main long-term value trends
This article concludes through an analysis of BTC halving cycle performance and its long-term scientific attributes:
The four halving cycles of Bitcoin exhibit a highly consistent market rhythm: that is, pre-halving expectations drive up prices, followed by short-term consolidation and momentum building, and then arriving at the main upward wave market. From the inflation rate perspective, after the 2024 halving, Bitcoin's annual inflation rate has dropped to 0.78%, the first time lower than that of gold, further solidifying its position as a scarce asset. In the context of persistently high inflation in the global fiat currency system, credit expansion, and increasingly massive debt deficits, Bitcoin's deflationary model and decentralized characteristics are attracting more and more traditional capital's attention and allocation.
Despite the short-term volatility in the market, and not ignoring the sudden emergence of black swans, the logic of Bitcoin's long-term value is becoming clearer: it is not just a cryptocurrency, but a new type of asset based on cryptography and consensus. In future cycles, its long-term value potential, ability to hedge against inflation, and the irreplaceability of its underlying technology, along with further ecological development, will continue to empower it, constructing the core value barrier that 'digital gold' should possess.
Reminder of perspective: Some people categorize the existence of speculation or conceptual fraud in the market as such, which is also an unobjective research attitude (or one could say that projects relying solely on speculation are hard to sustain, like many memes).
Risk Warning: This article's discussion on halving cycles and long-term value serves only as a reference for popular science and study, not as investment advice. Readers are advised to conduct thorough research, form their own judgment logic, and not blindly follow anyone.
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