Bitcoin halving happens every four years. The latest halving event happened in April this year and marked an important milestone in the history of the coin. Each halving event comes to reduce the reward miners get by half, with the 2024 event reducing the mining reward from 6.25 BTC to 3.125 BTC per block. The event is built into the Bitcoin ecosystem to create scarcity and keep the prices up.
The 2024 event has already sparked several market adjustments, and more are likely to be witnessed in 2025. Let’s explore what adjustments we might see throughout next year and other external factors that may have an impact on the price of Bitcoin going into the future.
What are the Immediate Market Reactions?
There is a blend of caution and optimism that comes with halving Bitcoin. Here are some of the immediate market reactions after the April event.
Bitcoin Prices Started an Upward Trajectory
If we look at the history of the coin, you will notice that the market does not react immediately to these events but experiences surge within six to 18 months. The 2024 halving event did not bring any different results. Just before the halve, the Bitcoin price stabilized at around $35,000 a coin. However, within a few weeks, the coin started to show signs of bullish momentum and crossed the $40,000 mark within a short time.
This was caused by increased scarcity of the coins, as few of them were now being mined. Scarcity does not affect the usage of the coin. You will still see people using them on merchant stores, gaming platforms, and more. For gamers, most VPN friendly casinos, like those listed on Casino.Guide, go for the coin due to the anonymity and ease of transactions from other jurisdictions.
Mining Costs Went Higher
This is bad news for miners; mining Bitcoin is now more expensive than it has ever been. Those that make money from mining activities have now to do with half the profit margins. This does not withstand the increased costs of energy. You are likely to see smaller operations pausing Bitcoin mining while large established entities scale back their operations.
More Investments into the Coin
The halving event has created increased optimism in the market. Most investors, especially the institutional ones, have started showing interest in Bitcoin as a deflationary asset. In the few months after the halving event, the trading volumes across various crypto exchanges started to go up. There has been a steady rise in Bitcoin ETFs, which were trading at volumes of approximately 72% of the gold EFTs trading volumes by mid-November. This is likely to grow even higher.
Comparing 2024 Halving with Other Events
As explained above, Bitcoin is a deflationary coin with a maximum supply of 21 million coins. The mining rewards are halved after about 210,000 blocks have been mined, which is about every four years. Here is some historical data on the same and how it relates to the current times.
After the 2012 halving, Bitcoin started an ascent towards the $1,000 mark and reached it within a year. The year 2016 halving also ushered in a bull market, which ended when Bitcoin reached a record high of $20,000 in late 2017. Finally, 2020 halving, the pandemic era halving, drove Bitcoin to unprecedented highs of $69,000 by late November 2021. The 2024 halving is also anticipated to cause a price climb that will rest after the coin reaches $100,000 or higher by mid-2025.
Factors Affecting Performance after Bitcoin Halving
There are several factors that have also pushed Bitcoin’s trajectory in the seven months after halving. They include the following:
Supply and Demand Dynamics
Let's face it: the halving of the coin led to the halving of the bitcoin that was entering the market. Since the demand for coins is still high, especially for institutional investors, the supply shock drove the prices higher than they had been anticipated.
Increased Institutional Adoptions
The approval of several spot Bitcoin ETFs in major markets has made Bitcoin more accessible to traditional investors. This influx of institutional capital is likely to provide a sustained boost to demand. This demand is expected to grow even higher in the coming months. Therefore, we expect the prices to keep moving up as long as the EFTs are doing well.
Changes in the Regulatory Environment
The global crypto regulatory landscape is still wildly against developments in the market. However, there has been hope that some of the stricter rules may change in the near future. One of the events that is giving the market some home is the ascent of Donald Trump to the White House. He had had a change of heart and seems to embrace Bitcoin development, even suggesting that he would make America a mining powerhouse for Bitcoin. If he pursues his promises, there might be rules that foster growth in the near future.
The 2024 Bitcoin halving has shown the resilience of the cryptocurrency economic model. The market has reacted to the halving with a bullish run, aided by several external factors and a generally enthusiastic trading environment. It remains to be seen how Bitcoin will fare in 2025 and beyond. Otherwise, if historical data is to go by, Bitcoin may do great over an extended period.
