Impact of Bitcoin Halving on the Crypto Market: Price Trends and Miner Revenue Analysis After the 2024 Halving

The impact of Bitcoin halving on the crypto market continues to spark industry discussions, and the 2024 Bitcoin halving event is even more noteworthy. Price forecasts post-halving have become a focal point for investors, with historical data analysis providing valuable insights to help us understand the relationship between halving cycles and miner rewards. Additionally, developing the right Bitcoin halving investment strategy is crucial for every investor. This article will delve into these topics, revealing the profound effects of Bitcoin halving.

Bitcoin halving is a key event that occurs every four years in the blockchain network, directly affecting the rate of new coin supply. According to Satoshi Nakamoto’s original design, the total supply of Bitcoin is permanently capped at 21 million coins. The block reward follows a preset decreasing mechanism to ensure that mining rewards diminish over time. On April 19, 2024, Bitcoin completed its fourth halving, with the block reward dropping sharply from 6.25 BTC to 3.125 BTC. The core purpose of this mechanism is to control the supply of new coins and reinforce Bitcoin’s scarcity as a digital asset. When supply growth slows while market demand remains stable or increases, scarcity becomes the main driver of price appreciation. This economic principle has been repeatedly validated in past halving cycles.

The 2024 halving event has triggered significant volatility in the crypto market. On that day, Bitcoin’s price was approximately $64,262, followed by a slight upward trend. Looking at a broader timeframe, the market’s response to halving spans nearly a year. In the lead-up to the halving, market participants anticipated scarcity, leading to pre-positioning and early price increases. On February 22, 2024, Bitcoin’s 14-day RSI reached 70.88%, approaching overbought territory. Historical data shows that when RSI exceeds 80, it often signals that the price could increase by over 50% within the next 60 days. The uniqueness of this halving cycle lies in the large influx of institutional funds, which has altered the market structure. Bitcoin order book liquidity has reached its highest level since October 2023, although still below pre-FTX crash levels. Overall, this trend reflects a steady return of confidence among market participants.

Bitcoin’s price performance after each halving cycle shows a clear upward pattern. The table below compares the price trajectories of three major halving cycles:

The second halving coincided with the European debt crisis, which undermined confidence in traditional finance, leading large capital flows into Bitcoin as an alternative asset. The third halving cycle saw an ICO boom, with over $5.6 billion flowing into other crypto projects, fueling ecosystem prosperity. The fourth halving occurred amid the COVID-19 pandemic, with inflation concerns boosting the appeal of safe-haven assets. Although the multiple increases tend to diminish with market maturity, the upward trend remains strong. Based on these historical patterns, experts predict Bitcoin’s price range in mid-2025 to be between $150,000 and $200,000.

Halving has a direct and severe impact on miners. The reduction in block rewards means that the income from mining new coins is instantly cut in half. However, a key market development provides miners with a buffer: transaction fee revenue is increasing significantly. In November 2023, the Ordinals ecosystem surge pushed Bitcoin transaction fees to a two-year high, exceeding $37 and even surpassing Ethereum gas fees at times. Since then, transaction fees have stabilized at over 20% of miners’ total revenue. This shift has reshaped Bitcoin’s incentive structure. Previously, miners relied mainly on block rewards, with transaction fees serving as a supplement. Now, transaction fees have become a critical incentive to maintain network security. As of February 22, 2024, Bitcoin has become one of the top three blockchains by NFT transaction volume, even leading the field in December 2023. This indicates that Ordinals activity not only provides tangible income for miners but also enhances Bitcoin’s role as an application platform. Miners need to improve operational efficiency, reduce electricity and hardware costs to adapt to this new environment.

The contemporary Bitcoin market’s driving forces have shifted from retail speculation to institutional allocation. A research report from the world’s largest asset management firm explicitly states that, facing the risk that U.S. federal debt could surpass $38 trillion by 2026, large institutions are seeking new hedging tools. Bitcoin has become one of their main choices. Data shows that their Bitcoin ETF has attracted over $100 billion in assets, becoming one of the company’s most important revenue sources. This institutional-level capital inflow fundamentally changes the market structure. Unlike the high volatility typical of retail markets, institutional funds tend to hold long-term positions and build positions gradually, stabilizing prices. Meanwhile, institutional participation enhances market liquidity and counterparty credibility, attracting more traditional financial players. Stablecoins, serving as a bridge between traditional finance and crypto liquidity, are also gaining importance. As more banks, asset managers, and payment companies enter the crypto space, the overall ecosystem’s maturity and credibility continue to improve. Against this backdrop, Bitcoin’s price performance after halving differs markedly from previous cycles, reflecting deep structural changes in the market.

This article analyzes the 2024 Bitcoin halving event, exploring its impact on price trends and miner rewards. It provides an in-depth interpretation of how the halving mechanism enhances scarcity and may trigger price increases, as well as the challenges miners face and new opportunities in transaction fee revenue. It discusses how institutional capital inflows are driving market changes and offers data comparisons from past halving cycles, giving readers a comprehensive understanding of the evolution of the crypto market and its potential opportunities. This article is especially suitable for cryptocurrency investors, miners, institutional investors, and financial analysts. Key topics include: Bitcoin halving, price trends, miner rewards, institutional investment. #BTC# #ORDI#