What Is Bitcoin Halving? Will It Crash Afterward? How Should You Prepare?
What Is Bitcoin Halving and Why Is It So Important?
Bitcoin generates new coins through a process called mining. In simple terms, miners use computers to solve complex mathematical problems to validate transactions and secure the network. In return, they receive a fixed amount of newly minted BTC as a reward.
Halving refers to the process where the reward for mining a new block is cut in half every 210,000 blocks—roughly every 4 years.
• In 2009 (Bitcoin's birth), each block yielded 50 BTC.
• In 2012, it halved to 25 BTC.
• In 2016, it halved to 12.5 BTC.
• In 2020, it halved to 6.25 BTC.
• In 2024, it halved again to 3.125 BTC.
Why Is Halving So Crucial?
The significance of halving lies in Bitcoin's fundamental economic design. It ensures a fixed supply capped at 21 million BTC, which underpins Bitcoin's identity as "digital gold."
As fewer coins are mined over time, the supply entering circulation shrinks. If demand remains steady or increases, prices are likely to rise. This predictable scarcity sets Bitcoin apart from inflationary fiat currencies and supports its role as a hedge against inflation.
When Is the Next Bitcoin Halving?
As of April 2024, Bitcoin has completed its fourth halving, reducing the block reward to 3.125 BTC.
The next halving (the fifth one) is expected in 2028, which will cut the reward further to 1.5625 BTC.
⚠️ Note: As block rewards continue to decline, miners will increasingly depend on transaction fees as their source of revenue. Over the long term, this will become a more integral part of the Bitcoin economy.
Historical Performance of Bitcoin Halvings
Bitcoin has gone through four complete halving cycles (2012, 2016, 2020, 2024):
• 2012 Halving: Price was around $12, with a subsequent peak gain of approximately +9,100%
• 2016 Halving: Price was around $650, with a subsequent peak gain of approximately +2,800%
• 2020 Halving: Price was around $8,600, with a subsequent peak gain of approximately +700%
• 2024 Halving: Price was around $65,000, with a subsequent peak gain of approximately +90%–100% (as of the 2025 peak at ~$124,500)
Overall, we can observe a declining rate of return in each halving cycle, indicating that the market is gradually maturing.
(A historical chart is shown below.)
The Post-Halving Crash Myth
There’s a popular saying in crypto: “Every halving is followed by a crash.” Is it true?
Historical trends do show a cyclical pattern:
• 2012 halving → 2013 bull run → 2014 crash (~80% drop)
• 2016 halving → 2017 bull run → 2018 crash (~83% drop)
• 2020 halving → 2021 bull run → 2022 crash (~75% drop)
This is why many investors believe: “After halving comes boom, then bust.”
Will the Halving Cycle Still Work?
Bitwise CIO Matt Hougan Believes Its Impact Is Fading
1. Institutional Inflows via ETFs
Hougan argues that the rise of spot Bitcoin ETFs since 2024 has changed market dynamics. The capital entering Bitcoin today is more long-term and diversified, often managed via wealth managers and retirement funds. This weakens the influence of the miner reward cycle.
2. Diminishing Halving Impact
Hougan states, “The four-year cycle is dead.” As Bitcoin’s market cap and liquidity increase, the relative impact of reduced block rewards continues to decline. This makes halving less potent as a driver of price.
3. A More Resilient Market Structure
With market makers, perpetual futures, and options markets maturing, price discovery has become more efficient. Extreme volatility is now more easily absorbed, turning one-time narratives like “halving” into long-term trends rather than sudden spikes.
How Should Investors Prepare for Bitcoin Halving?
Given that halving can increase volatility, how can investors plan wisely? Here are a few strategies especially suited for those new to crypto:
1. Use Dollar-Cost Averaging (DCA)
Avoid going “all in.” Instead, invest at fixed intervals to average out your entry price and reduce short-term risks.
2. Diversify Your Portfolio
Never put 100% into Bitcoin. Allocate according to your risk tolerance and capital.
📚 Recommended Reading:
How to invest in Bitcoin with a monthly salary of NT$35,000?
Bitcoin vs Stocks vs Real Estate
Building Your Crypto Asset Portfolio from Scratch: Become a Survivor in the Crypto World
3. Use Stablecoins for Hedging
When the market spikes too fast, consider taking profits into USDT or USDC, and re-enter after a correction.
📚 Learn More:
USDT vs USDC vs FDUSD: 2025 Stablecoin Comparison & Risk Analysis
Conclusion
Bitcoin halving is not a guaranteed boom-or-bust event. Rather, it's a reminder of Bitcoin’s built-in scarcity and long-term value.
Your investment results depend not on market cycles alone but on whether you adopt a long-term, disciplined strategy. If you want to navigate halving wisely, start with gradual entries and flexible hedging tools—let halving be a tailwind, not your only compass.
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ZONE Wallet is a blockchain investment gateway designed for Taiwanese users. It combines full regulatory compliance, cutting-edge security, and TWD transaction support, with a mission of making “every crypto transaction safe and secure.” Start building your crypto portfolio with ease—today.Investing in virtual assets carries risks related to price volatility and liquidity. The above content is for reference only and does not constitute any financial advice. Please carefully assess your financial situation before investing and be cautious of potential fraud.
