The strange Bitcoin halving in the history of digital currencies

Bitcoin history has never seen the price peak before halving like this year and the explosion of meme coins is breaking most of the old rules of the market.

Cryptocurrency analysts call this year's Bitcoin halving the strangest bull cycle in history. On March 14, this major cryptocurrency reached 73,734 USD per coin, an all-time high (ATH), about a month before the halving took place. Meanwhile in previous cycles, ATH occurred about a year after halving.

To limit inflation when too many people participate in mining digital currencies, Nakamoto Satoshi, the father of Bitcoin, added a piece of code so that after every 210,000 mining blocks, the reward for miners will be halved. This algorithm is called Bitcoin halving and occurs on average every four years. During the first halving, the reward decreased from 50 to 25 Bitcoins per block. The fourth halving is scheduled to take place on April 20 and at that time, miners will only receive 3,125 Bitcoin when opening a new block.

After each "halving", Bitcoin price peaks. For example, the price of Bitcoin before the halving in November 2012 was 12 USD, but nearly a year later it increased to nearly 1,000 USD. With the halving in July 2016, Bitcoin dropped to 670 USD and then to 19,700 USD at the end of 2017. And after the "halving" in May 2020, Bitcoin increased from 11,500 to the "peak" of 69,000 USD in November /2021.

Illustration of the world's two largest cryptocurrency projects, Bitcoin (right) and Ethereum. Source: Cointelegraph

The second special thing is the price movements of the market. Typically, Bitcoin price corrections impact Ethereum first . However, this time, things are not following the rules when money flows into meme coin .

Zach Rynes, representative of the Chainlink community project, commented on X on April 1: "The market is experiencing a strange growth period. Previous halvings have seen money flowing into Bitcoin, then moving to Ethereum and other Highly capitalized copper, then new projects." This year, the market has skipped some steps as the money is flowing straight to meme coins. "This is a bit unusual," Rynes commented.

Cointelegraph statistics show that the total capitalization of meme coins increased to 70 billion USD in April 1, mainly driven by newly launched tokens such as Dogwiphat, Book of Meme and older coins such as Pepe and Bonk. The newly launched Degen is also becoming a hot spot with an increase of 2,800% in the past month.

In the cryptocurrency market, meme coins are tokens inspired by popular images on the Internet or real-life events. Unlike famous cryptocurrency projects such as Bitcoin or Ethereum, meme coins do not have fundamental technical value or solve any real-life problems. Most people play meme coin for entertainment or speculation.

According to Rynes, the early boom of meme coins made analysis of traditional market rules irrelevant. "There is an amount of money that has been pumped into the market by retailers but not to the extent of previous halving cycles. Now, we are relying on newly established specific cases, not on principles basic principles", Chainlink experts commented.

Ethereum analyst Anthony Sassano also commented similarly. He said that after a decade of participating in the cryptocurrency industry, this is the strangest halving he has ever witnessed. "The money flowing into the market does not follow any rules," Sassano said on X.

Some analysts predict the price of the world's largest cryptocurrency could reach $100,000 by the end of this year. However, market movements will be more unpredictable because traditional rules are being broken.