A Year After Bitcoin’s Halving: Why Is It Different This Time?

It's been over a year since the fourth halving, and bitcoin is still treading water - trading about 12% below ATH, established at the time of Donald Trump's inauguration. Given historical patterns, this is the most lackluster performance in all market cycles.

Previously, after halving for 12 months, the first cryptocurrency consistently pleased investors with cheerful ”X's”. However, the years 2024-2025 are out of the usual scenario - it's as if the market is stuck in wait-and-see mode.

Why it is different this time - let's analyze in Coinpaper's article.

Historical patterns vs current cycle

According to researchers at Kaiko, the bitcoin price soared 7000% in the 12 months following the 2012 halving, with market phases in 2016 and 2020 seeing gains of 291% and 541% respectively. 

Obviously, in the current cycle, the price is not reaching these results. After reducing the reward per block from 6.25 BTC to 3.125 BTC, digital gold rose in price by only 46%.

Price dynamics remain sluggish amid growing macroeconomic uncertainty. In the first quarter of 2025, global tensions intensified due to the introduction of ”liberation” duties, which reduced investors' risk appetite.

In the six months following the fourth halving of the block award, the average economic policy uncertainty index (as measured by FRED) was at 317. By comparison, in similar post-halving periods, the index was 107 in 2012, 109 in 2016, and 186 in 2020.

EPU is an indicator that measures the level of uncertainty in economic policy based on analysis of media content, tax expenditure forecasts and disagreement among experts. High values of the metric correlate with an increase in stock volatility, a decline in investment and a strengthening of ”protective” assets like gold. In 2020-2022, EPU growth coincided with capital inflows into bitcoin, which many consider as a hedge against inflation and political risks. Research shows that at values above 150, interest in digital gold increases.

The market is maturing

According to Kaiko, the 60-day volatility of the bitcoin price has dropped significantly, from over 200% in 2012 to barely 50% currently.

Onchain analyst Tiago Amaral noted that data from the MVRV indicator ”sharply reduced unrealized gains” for long-term investors. This, he argued, is a sign of a maturing market and declining potential returns.

In the 2016-2020 cycle, the indicator peaked at 35.8. This indicated significant ”paper” profits and the formation of a clear market peak. In 2020-2024, the peak declined sharply to 12.2, despite the ATN update.

He also noted that at this point it is too early to say that the final top of the current cycle has been reached. Historically, the market has often gone sideways or demonstrated moderate corrections before updating the highs.

Given the growing influence of institutionalization, it is possible that the current accumulation phase will be longer than in previous cycles.

Cycles and miners

The structure of the crypto market evolves over time, and the four-year cycles familiar to many seem to be losing their former relevance.

Bitcoin Magazine Pro and Blockware Solutions analyst Mitchell Askew believes that with the arrival of institutional investors, ”bitcoin's parabolic growth model” followed by deep pullbacks is changing. Meanwhile, the mining industry is becoming more efficient and stable, which is also affecting supply and price trends.

Earlier halving was traditionally accompanied by a rapid growth of quotations, which was often followed by a correction of 70% or more. Now this factor is not so significant, but there are more and more institutional investors. They make the market more stable, but also dependent on macroeconomic aspects.

Askew said spot ETF and corporate investments help stabilize bitcoin demand, reducing the likelihood of sharp price swings. In contrast to retail traders, who tend to buy on a wave of euphoria and panic sell off during corrections, institutional traders are more likely to take profits on the upside and accumulate assets during periods of decline.

Like other experts, Askew also noticed longer periods of consolidation before growth resumes. In his opinion, bitcoin is increasingly showing itself as a traditional financial asset, losing the features of a highly volatile and speculative instrument.

The specialist noted that the efficiency of mining equipment has reached a plateau, which can significantly affect the production and supply structure of bitcoin. According to his observations, new models of ASIC devices are only 10% more efficient than the previous ones, which allows them to remain profitable for four to eight years;

But it's not just periodic rewards cuts that are affecting the profitability of digital gold mining.

Thus, it is now more difficult and costly to mine than ever before. But what is the cost of mining one bitcoin? It is not easy to answer unambiguously, because the key aspect is the price of electricity, which varies from region to region.

Researchers at CCAF estimate the average cost of mining 1 BTC at $49,887.

A correction of more than 40% - from current levels around $94,000 to breakeven $50,000 - looks unlikely. Accordingly, the chances of miners' capitulation in the foreseeable future are also slim;

The dust from the ”liberation” duties has settled, and the vast majority of onchain metrics are not even close to the overheating zone. The market remains relatively stable, but the question is increasingly being asked, ”When will the rally resume?”.

Should we expect an ace this year?

In March, CryptoQuant head Ki Yong-Joo concluded that the bullish trend is over - in the next 6-12 months the market is expecting a correction or a prolonged ”sideways”.

After rising to $94,000, the expert recognized that the price was 10% above the level at which he announced the end of the bullish trend.

Kee Yong-Joo added that he will continue to monitor the data for a few more weeks looking for signs of a reversal. However, until the price crosses the $100,000 mark, his view remains the same: it is too early to talk about the return of the uptrend.

Some onchain analysts are more optimistic. For example, the author of CryptoQuant under the nickname IT Tech noticed that after several weeks of persistently negative values, the Apparent Demand indicator has turned upward, indicating a clear recovery in demand.

The metric reflects the net change in the volume of coins that did not move during the year, taking into account daily block awards. It serves as a proxy for the strength of demand.

According to his observations, this is the first significant change in the indicator since February, occurring against the backdrop of increased inflows of funds into spot bitcoin-ETFs and the accumulation of long-term investors' positions.

Capriole Investments founder Charles Edwards concluded based on the Bitcoin Energy Value (BEV) model that the first cryptocurrency is trading 40% below its fair value of $130,000. 

BEV determines the ”fair price” of digital gold based on the energy used to mine it. Here's how this metric is calculated:

V = E*C/S

where: 

• E - energy consumption of miners (in joules or TWh/year);
• C - fiat constant (converting energy into dollars);
• S - bitcoin supply growth rate (takes into account halving).

An expert under the nickname Crypto Caesar confident: overcoming the psychological mark of $100,000 will open the way for bitcoin to new all-time highs in the range of $110,000-115,000.

In his view, the $89,000-90,000 support range is good for active buying and is designed to limit potential drawdowns in the bitcoin price. 

The $70,000-72,000 area below remains ”undeveloped” for now. It coincides with the diagonal support line, which may play a key role in case of a deepening correction.

The growing share of bitcoins purchased at lower prices indicates that they are approaching the ”historical level of euphoria”, shared the observations of CryptoQuant analyst under the nickname Darkfost.

According to his observations, the said figure is once again above 85%, which is ”quite positive.” During the past correction, the metric dropped to nearly 75%.

Darkfost colleague Carmelo Aleman noted: realized capitalization of digital gold has once again reached a record high.

The researcher sees this as a bullish signal and signs of ”confidence in the asset” among whale and retail investors who are ”betting on strong growth in the near term.”

The metric represents the total value of all bitcoins in circulation, calculated based on the last move price of each coin on the blockchain.

Some analysts are even more optimistic about the future. For example, Peter Changof Presto Research projects bitcoin's growth to $210,000 by the end of 2025.

According to him, this dynamic will be influenced by increasing institutional interest and rising global liquidity. He also believes that the recent corrections have been a ”healthy shakeout” that has laid a stronger foundation for a further uptrend.

Jeffrey Kendrick of Standard Chartered has a more subdued outlook: he expects bitcoin at $120,000 in the fourth quarter. By the end of 2025, he estimates the price could reach $200,000. He attributes such growth to the beginning reallocation of capital from U.S. assets to the first cryptocurrency.

Bernstein analysts predict that by the end of 2025, the cryptocurrency will reach the peak values of the current cycle around $200,000. Despite the inevitable bear phases, experts envision growth to $500,000 by 2030 and $1 million by the end of 2033.

Conclusion

A year after the fourth halving, bitcoin shows atypically sluggish dynamics: +46% instead of the previous hundreds and thousands of percent;

Analysts attribute the restrained growth rate to high macroeconomic uncertainty and the maturation of the first cryptocurrency. Now it resembles a traditional financial instrument - this is hinted at by growing correlation with gold amid turbulence. Bitcoin is losing the traits of a speculative asset: volatility is steadily falling, as are the ”paper profits” of hodlers.

The growing influence of ETFs and whale-institutions that ”accumulate on the fall” makes the market more stable. Therefore, analysts predict a transition to gradual and more restrained growth, where macro trends and regulatory clarity will play a key role.  

Many experts believe that the bull phase is far from over, expecting new highs as early as this year. However, unlike previous cycles, a longer price consolidation is possible before a new growth impulse.