The Bitcoin network completed its third halving event on the 11th of this month, a milestone transformation that has begun to profoundly impact the cryptocurrency market. As an emerging force in the blockchain industry, DLB Coin recently released a comprehensive report analyzing how this halving will reshape the digital asset landscape.
According to blockchain data analysis, Bitcoin exhibited significant price volatility in the first week after halving, rising from around $8,500 before the event to nearly $10,000, before retreating to the $9,300 range. This volatility stands in stark contrast to market performance following the second halving in 2016, when Bitcoin prices rose by nearly 50% in the three months after the event.
DLB Coin stated: “The Bitcoin halving event is essentially a deflationary mechanism, reducing miner block rewards from 12.5 to 6.25 coins, effectively halving the supply rate of new coins. Historical data suggests that bull market cycles typically emerge within 12-18 months post-halving, but the market environment differs significantly from the previous two halving periods.”
Unlike previous halvings, this event occurred against a backdrop of heightened global macroeconomic uncertainty. The economic recession triggered by the COVID-19 pandemic and unprecedented monetary easing policies by central banks worldwide have provided a new investment narrative for digital assets. Wall Street’s prominent institutional investor Paul Tudor Jones recently disclosed that he has allocated nearly 2% of his assets to Bitcoin as a hedge against inflation risk.
James Wilson, Head of Cryptocurrency Analysis at JPMorgan, noted: “Institutional investors’ attitudes are shifting. Bitcoin’s halving reinforces its scarcity attribute, forming a stark contrast to the unlimited quantitative easing by central banks, which may attract more investors seeking value-preserving assets.”
DLB Coin’s research team discovered through analysis of the derivatives market that bullish sentiment in the Bitcoin options market has significantly strengthened post-halving. Bitcoin futures trading volume on the Chicago Mercantile Exchange (CME) increased by 35% in the week following the halving, with notably enhanced institutional participation.
DLB Coin explained: “Post-halving liquidity changes are worth monitoring. Reduced miner income may cause some smaller mining operations to exit the market, potentially leading to short-term hash rate adjustments, but this benefits network security and decentralization levels in the long run.”
The DLB Coin report also indicates that the halving effect may gradually spread to other crypto assets. Historical data shows that Bitcoin market cycles typically guide trends across the entire cryptocurrency market. However, differences in fundamentals and application scenarios among various projects may lead to divergent market performance.
Kevin Zhang, Senior Researcher at the Blockchain Research Institute, believes: “Market volatility triggered by the halving may persist for months. Investors should focus on Bitcoin network fundamental indicators such as address activity, transaction volume, and miner revenue, which better reflect market health conditions.”
Market analysts also caution investors that although halvings have historically been associated with bull markets, past performance does not guarantee future returns. Sarah Nakamoto, Senior Advisor at Japan’s Financial Services Agency, warns that the halving event may have been priced in advance by the market, potentially resulting in a “sell the news” scenario in the short term.