Bitcoin Value Trend Research: Exploring the Value Evolution Code in Four Halvings

Authors: SanTiLi, Naxida, Legolas

This article will focus on the four halving events of Bitcoin from 2012 to 2024, systematically sort out the halving mechanism of Bitcoin, the trend of inflation rate, and combine the market performance before and after the previous halving to deeply discuss its impact on the price trend. Through historical data analysis and macro comparison, this paper points out that Bitcoin has entered a cyclical range where the inflation rate is lower than that of gold, and its scarcity is becoming more and more prominent, and it gradually has a long-term value logic to compete with traditional assets. At the same time, judging from the cycle rhythm of the four rounds of halving, although the halving in 2024 has risen modestly, it is still in the stage of gaining momentum, and the real window may gradually open between 2025 and 2026. Finally, the article discusses the core value foundation of Bitcoin, including scarcity, decentralization mechanism, and deflationary model, and points out that its logic as "digital gold" is maturing day by day.

1. Bitcoin Halving Cycle Basic Reward and Inflation Rate

Bitcoin was designed by Satoshi Nakamoto in 2009, with a total supply capped at 21 million coins. In the early days, miners would receive 50 BTC as a reward for successfully mining a block. This reward is automatically halved approximately every 210,000 blocks (about every four years), gradually reducing the rate of new issuance.

The BTC halving cycle officially started in 2012, with a halving every four years. The next halving is in 2024, with each block reward being 3.125 BTC. The annual inflation amount is: 52560 x 3.125 = 164,250 coins, which accounts for about 0.782% of the total supply. An inflation rate of around 0.78% is already lower than the annual inflation rates of the vast majority of developed countries. The inflation rate of gold mining's increased output is approximately between 1.5%-2%. Currently, BTC has entered a cycle where the 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 million coins, accounting for about 12.5% of the total 21 million. In 2025, when each block has a reward of 6.25, the annual increase will be: 52560x6.25=328.5 thousand, accounting for approximately 1.564% of the total 21 million.

As of around 14:00 on May 7, 2025, a total of approximately 19,861,268 BTC has been mined, accounting for about 94.58%, with a total market value of approximately $2 trillion ($2034,300,009,004). Compared to the last halving cycle in 2020, when about 18,385,031 BTC was mined, accounting for about 87.5%, the total market value at that time was approximately $161.8 billion. After about 5 years, the total market value has increased by approximately 1236%.

The inflation rate for the next 4 years will only be 0.782% per year,

Fig.2 Comparison of Inflation Rates of Major Countries Worldwide from 2019 to 2025

In 2019, China's inflation rate was about 2.9%, while the United States had an inflation rate of 2.3%. At that time, due to COVID-19 relief in 2020, we predicted that the substantial increase in the issuance of US dollars would likely lead to a significant rise in inflation rates from 2020 to 2022. Indeed, the inflation rate in the United States reached a high of 8%, which subsequently declined annually due to the Federal Reserve's interest rate hike policy, decreasing to around 2.2% by 2024. In contrast, China's annual inflation was about 0.2%, which is relatively good compared to major countries in terms of controlling inflation rates (2019-2024: data from official statistical agencies of various countries. 2025: data from the International Monetary Fund (IMF) report and actual updated forecast values.) Most developed countries reported inflation rates around 2.5%, but the actual shopping experience and currency depreciation felt should be significantly greater than the statistical data.

At this time, this Bitcoin halving will reduce the inflation rate of BTC by half again, entering a new historical low inflation level of 0.782%. The reduction in the inflation rate is not a bad thing for any asset in principle, as it further 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 a relatively important factor against depreciation.

2. Comparative Analysis of Market Performance After the 4th Bitcoin Halving

Since the advent of Bitcoin, each halving of block rewards has had a profound impact on the market price of BTC. From 2012 to 2024, the four halving events have shown some relatively consistent cyclical characteristics. This article provides a detailed comparison of the market price trends before and after each halving, and extracts some valuable patterns for readers to reference. History never repeats itself exactly, but there are always similar patterns before reaching a peak or nearing destruction.

Fig.3 Value Change Data Chart of BTC Four Halving Cycles

As shown in Fig.3, the trend data of BTC's four halving events, the first half year before halving, and one year after halving, as well as the peak points during the corresponding cycles, are summarized. It can be seen from the chart that the price of Bitcoin has experienced significant increases after each halving. Taking the closing price on the day of halving as the baseline, the increase within one year after the 2012 halving exceeded 8000%, approximately 286% after the 2016 halving, and about 475% after the 2020 halving, while the increase within one year after the 2024 halving is only about 31% (the highest so far being 68.75% - $109588).

1. Significant price increase generally observed 6 months before halving

Looking back at the four halving events, Bitcoin usually starts to enter an upward trajectory about half a year before the halving. For example:

• During the halving in 2012, the price increased by 141.03% compared to 6 months earlier.
• The 2024 halving has increased by 118.88% compared to 6 months ago.

This stage often corresponds to the market gradually pricing in the "halving expectation," which has strong signaling value for preparation.

2. The core outbreak period is 6 to 12 months after the halving, but it is not necessarily the highest point

Historical experience from three cycles shows that the 6 to 12 months after the halving is the main bullish phase for Bitcoin.

• Year 2012: An increase of 8181.51% one year later
• 2016: A year later, the increase was 286.29%
• Year 2020: Increase of 475.64% after one year
• Year 2024: Not yet a full year, currently at 31.18%, with a maximum of 68.75% ($100.9k)

Especially in 2012 and 2020, it exhibited the typical structure of "consolidation within six months, followed by an explosion." One year later, it entered the maximum explosion period, reaching a temporary historical high. Currently, with the halving in 2024 just under a year ago, if history repeats itself, the real explosion window may open between 2025 and Q1 2026.

3. The trend in the first year after the halving has preliminary reference significance for judgment.

After the halving in 2024, Bitcoin rose by 10.02% within a month, but then fluctuated and adjusted over the next two months, overall remaining in a consolidation phase. As of October 2024 (six months post-halving), the price has only slightly increased by 6.30% compared to the halving day, far from entering a main bullish phase. However, this is not uncommon in history, as both 2016 and 2020 only officially started their market trends six months after the halving.

4. The peak of each bull market mainly occurs within 6-12 months after the halving, one year later

According to the data from the first three rounds, the closing price and highest price relative to the halving date during the halving cycle occurred in the interim before the next halving:

• Year 2012: Highest increase of 9237.15%
• Year 2016: Increase of 2825.84%
• 2020: Increase of 700.28%

After the halving in 2024, a peak of $109,588 has already been reached, which is an increase of 68.75% compared to the halving day, and it has not yet entered the exponential explosion phase. This pattern only applies to this round, because after this round ends, if BTC can reach values of 300,000 to 500,000 or even around 1,000,000, then its valuation will be very large. In the next halving, unless it is in reference to the devaluation of anchor assets or further expansion of application exploration, such as interstellar exploration, it will be difficult to see several times of growth again.

Chart Summary:

The historical halving cycles of Bitcoin show a highly consistent three-phase rhythm:

Gaining momentum (6 months before the halving) → Stable volatility (6 months after the halving) → The outbreak of the main rising wave (6~18 months after the halving) The current 2024 halving is about to complete a year, which means that the market may still be accumulating energy for the later outbreak. Similar to the eve of 2017, coincidentally, it was also the early days of Trump's presidency. At the same time, the Stock-to-Flow chart also indirectly assists us in the reference value points that are still in the thick of accumulation: but historical data and laws only have reference value, and we should not blindly follow the guidance of the data, but also have enough self-judgment to study DYOR.

Fig.4 Bitcoin Price Stock-to-Flow Chart

3. The long-term value scientific attributes of BTC

The value of an asset stems 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 just a type of cryptocurrency; it is an innovative achievement at the intersection of multiple disciplines, including technology, economics, mathematics, and cryptography. Its long-term value is not maintained solely through market speculation but is based on a comprehensive, rigorous, verifiable, and tamper-resistant system design.

1. Scarcity:

As we mentioned earlier, the total supply of Bitcoin is fixed at 21 million coins, which was written into the protocol by Satoshi Nakamoto in the underlying code and is gradually released through a block reward halving mechanism. Halvings occur approximately every four years, with the final issuance expected around the year 2140. In contrast to the unlimited issuance mechanism of fiat currency, Bitcoin has 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 mechanisms ensure network neutrality

The Bitcoin network relies on a decentralized PoW (Proof of Work) consensus mechanism provided by computational power, allowing any node to verify transactions and participate in maintaining the ledger. This structure effectively avoids issues found in traditional financial networks, such as centralized single points of failure, abuse of power, and system control. The significant global decentralization also minimizes the risk of a 51% attack.

3. Deflation Model Against Fiat Currency Devaluation

As shown in Fig2, the deflationary issuance model built into Bitcoin stands in stark contrast to the inflationary structure of fiat currencies around the world. Especially in the context of massive QE by global central banks and the proliferation of money since 2020, Bitcoin has gradually proven that it can serve as a hedging tool against the devaluation of fiat currencies and the risks of asset bubbles. 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 Digital Signature Algorithm (ECDSA): Ensures account security and private key signing
• SHA-256 hash algorithm: ensures data immutability
• Merkle tree structure: Efficient verification of transactions within blocks
• P2P Peer-to-Peer Network: Achieve global value transfer without intermediaries

The combination of these core technologies makes Bitcoin a highly robust, counterfeit-resistant value transfer network, while also possessing infinite scalability, laying a solid foundation for subsequent layer-two expansions (such as the Lightning Network and ecological applications). BTC is not only an asset but also a masterpiece of cryptographic engineering. Future post-quantum updates are also worth looking forward to.

5. Challenger to the Global Financial Order: Alternative Consensus Assets in the Changing Trend of the US Dollar

The world is currently experiencing a wave of de-dollarization: settlements among countries are beginning to shift towards local currencies, gold, and the #去中心化资产。比特币以其非主权客观性、全球化、稀缺性等特质，成为新兴市场与动荡国家资产转移与储值的重要通道。它构建了一种与# dollar, creating a new financial order model where #gold exists but is independent—"the neutral system of consensus currency." When the "credit of certain countries" is hard to trust, relying on objective algorithmic credit will become an international moat, and of course, further intervention from regulatory agencies in various countries will be needed to prevent the frequent occurrence of illegal activities.

6. The Potential Financial Infrastructure of Interstellar Civilizations (Currently Not Applied, Personal Exploration Perspective)

Bitcoin is currently the only value protocol that does not rely on any country or internet entity, #银行、#. Its ledger can exist on any node across the planets, requiring only electricity and computing power to maintain the network. This structure is inherently suitable for future space exploration scenarios, such as Mars or Moon exploration, facilitating quick and direct usage and application. However, since human exploration of extraterrestrial environments is still in its infancy, with no significant breakthroughs in stable landing and arrival, this point remains a matter of personal imagination. But when looking at a 30-50 year cycle, it seems that initial planetary applications are not completely impossible. Bitcoin (or credit-like points) could serve as the underlying token of human digital civilization.

So the overall scientific attributes of BTC:

• Supply ceiling (scarcity) + Consensus strength (decentralization);
• Real-world background: The credit of fiat currency continues to weaken, and the debt bubble is expanding;
• In the uncertainty of the future, Bitcoin's "anchoring attributes" are becoming increasingly prominent.

Four, Summary of the Main Long-term Trend Value of BTC

This article draws the following conclusions through the analysis of the performance of the BTC halving cycle and the study of its long-term scientific properties:

The four-year halving cycle of Bitcoin shows a highly consistent market rhythm: expectations drive prices up before the halving, followed by a short-term consolidation to build momentum, and then a main bullish wave ensues. From the perspective of the inflation rate, after the halving in 2024, Bitcoin's annual inflation rate will drop to 0.78%, falling below gold for the first time, further solidifying its status as a scarce asset. Against the backdrop of persistently high inflation in the global fiat system, expanding credit, and increasingly large debt deficits, Bitcoin's deflationary model and decentralized characteristics are attracting more and more attention and allocation from traditional capital.

Despite the short-term volatility in the market and the potential for unexpected black swan events, the logic behind the long-term value of Bitcoin is becoming increasingly clear: it is not just a cryptocurrency, but a new type of asset based on cryptography and consensus. In the future cycles, its long-term value potential, ability to hedge against inflation, and the irreplaceability of its technological underpinnings, along with further ecological development, will continue to empower it and build the core value barriers that "digital gold" should possess.