Unabated Ascent of Bitcoin: 3 Key Factors
In the ever-changing world of cryptocurrency, Bitcoin continues to capture the attention of investors and economists alike. The latest halving event, which took place in April 2024, has sparked renewed interest in the digital asset as some critics who were once sceptical are now considering it a smart addition to their portfolios.
Historically, Bitcoin’s price tends to increase significantly in the 12 to 18 months following halving events due to the reduction in new supply entering the market. This trend has been evident in previous halvings, with the 2012 halving seeing an approximately 7,000% increase and the 2016 halving resulting in a 291% surge. The post-halving cycle could contribute to Bitcoin's surge once again.
However, experts in 2025 debate whether this historic four-year cycle remains as predictive today. The maturing of the market, increased institutional participation, and evolving macroeconomic conditions may now exert greater influence on price dynamics. The halving mechanism still reduces supply predictably, but external factors could play a more significant role in shaping Bitcoin's price trend post-2024 halving.
The macroeconomic backdrop in 2025 is particularly crucial. Persistent global economic challenges, such as inflation rates, central bank policies, geopolitical tensions, and overall market sentiment, are shaping Bitcoin's price trend post-2024 halving. Unlike earlier cycles, Bitcoin's price movement in 2025 may be less driven purely by supply-side effects and more by how it competes as an asset in a complex economic environment, including investor appetite for risk and inflation hedging.
Despite these uncertainties, the scarcity of Bitcoin—with a total of 21 million coins that will ever be in circulation—remains a compelling factor. Over the long term, Bitcoin's price is likely to be much higher due to its scarcity. Additionally, the increasing relevance of Bitcoin as a store of value, coupled with its inability to be debased, means that more capital over time is likely to gravitate toward Bitcoin.
In conclusion, while the traditional four-year cycle linked to halving is being questioned in 2025, the macroeconomic environment, with evolving inflation and policy conditions, may impact whether the halving’s supply shock leads to similar price increases as in the past. As the world continues to grapple with economic challenges, Bitcoin's role as a potential hedge against inflation and its scarcity could make it an attractive investment for many.
- The post-halving cycle in 2024 could contribute to Bitcoin's surge once again, but expertise from 2025 suggests that the traditional four-year cycle may no longer be as predictive, given the maturing of the market, increased institutional participation, and evolving macroeconomic conditions.
- In the complex economic environment of 2025, Bitcoin's price movement may be less driven purely by supply-side effects and more by investor appetite for risk, inflation hedging, and how it competes as an asset compared to other financial instruments.
- Over the long term, the scarcity of Bitcoin, with only 21 million coins that will ever be in circulation, presents a compelling reason for investors to consider Bitcoin as a potential store of value, given its inability to be debased and the increasing relevance of Bitcoin as a hedge against inflation.
