Bitcoin halvings are major events that reduce the rewards miners receive, increasing scarcity and often leading to major changes in the market. Here’s a summary of the good and bad news about each halving and its impact on the market:
First downsizing (2012):
Event Impact: The market begins to mature, but challenges arise.
Bad news:
2011: The first major hack of the Mt. Gox exchange shakes early confidence in Bitcoin, leading to losses.
Second downsizing (2016):
Event Impact: Bitcoin gets more attention, but global regulatory pressures mount.
Bad news:
1. 2013: China bans banks from dealing in cryptocurrency transactions.
The FBI seizes Silk Road servers, creating fears of government action against cryptocurrencies.
2. 2014: Another Mt. Gox hack wipes out customer funds, leading to a two-year bear market.
Third Reduction (2020):
Event Impact: Institutional adoption begins, but regulatory and systemic challenges persist.
Good news:
1. 2017-2018: The ICO and altcoin boom attracts huge investments.
2. 2021: Tesla buys $1.5 billion worth of Bitcoin, boosting credibility.
El Salvador becomes the first country to adopt Bitcoin as legal tender, inspiring global interest.
Bad news:
1. 2017: China bans all initial coin offerings (ICOs), creating uncertainty for startups.
2. 2021: China bans cryptocurrency trading and mining, causing a temporary market downturn.
Fourth downsizing (2024):
Event Impact: Bitcoin establishes itself as an institutional asset, but the market faces potential risks.
Good news:
1. 2024: The US Securities and Exchange Commission (SEC) approves 11 Bitcoin exchange-traded funds (ETFs), paving the way for institutional investment.
Bad news:
1. 2022: FTX collapse shocks the market and undermines confidence in centralized exchanges.
The collapse of the Luna system results in the loss of billions of dollars in investor funds.
2. 2024: Potential risks from Mt. Gox-related payments and asset sales by German investors could weigh on the market.
80%-90% market correction is expected.
Bitcoin’s historically low rewards mark a shift in market cycles, with a mix of opportunities and challenges.
Upside: Institutional adoption, regulatory clarity (e.g. Bitcoin ETFs), and adoption by some countries boost long-term growth.
Downtrends: Regulatory crackdowns, platform failures, and market volatility often follow major events.