Bitcoin has successfully completed its third block reward halving, a significant event occurring approximately every four years. While this event is often framed within the broader “halving牛市” (halving bull market) narrative, it marks just the beginning of a new phase for Bitcoin’s economy.
On May 12, at 3:23 AM UTC, at block height 630,000, Bitcoin’s block reward was reduced from 12.5 BTC to 6.25 BTC. This reduced the number of new Bitcoin mined daily from around 1,800 to 900. At the halving time price of approximately $8,545, this means the daily mining revenue dropped from about $15.4 million to $7.7 million.
Compared to the extreme volatility seen in the days leading up to the event, the price action on halving night was relatively stable, with intraday price swings staying within a 10% range.
Short-Term Price Reaction and Market Sentiment
In the 24 hours surrounding the halving, Bitcoin’s price experienced a familiar pattern. It saw a pre-halving pump of roughly 7%, followed by a 9% drop, before bouncing back upon the event's completion with a 5% rise. It subsequently entered a phase of consolidation around the $8,500 level.
Data from major exchanges indicated that long and short positions were nearly balanced, reflecting a market in wait-and-see mode. This suggests that while the event was highly anticipated, traders were not placing overwhelmingly directional bets immediately afterward.
Short-term analyst views are mixed but lean cautiously optimistic. Some experts believe the post-halving period will likely see downward consolidation but interpret any significant dip as a potential accumulation opportunity, positing that the market is in the late stages of a major correction.
Other analysts compare the short-term halving effect to a "bubble-blowing" phase. The market becomes hyper-focused on the event, volatility increases due to excited investor sentiment, and a short-term bubble forms. As the event passes, this speculative fervor dies down, short-term capital exits, and the bubble may deflate.
The Long-Term Outlook: Beyond the Halving Hype
The classic explanation for post-halving bull markets is simple: a slowdown in the supply growth rate fails to keep up with rising demand, pushing the price upward. However, the crypto market is vastly different from those of 2016 and 2020. Can we rely solely on this historical pattern?
Most analysts agree that while the halving is a crucial underlying factor, it is not the sole driver of a major bull market. The core argument is that genuine innovation, not just scheduled scarcity, fuels sustainable long-term growth.
- 2012-2013 Cycle: Innovation was the birth of major Bitcoin exchanges, improving access and liquidity.
- 2016-2017 Cycle: Innovation came in the form of Ethereum and the subsequent explosion of altcoins and, crucially, the ICO funding model.
- 2020-2025 Cycle: The question remains: what will be the key innovation? Many point to the maturation of institutional infrastructure, regulatory clarity, and the development of robust decentralized finance (DeFi) applications.
Furthermore, global macroeconomic conditions cannot be ignored. With central banks worldwide engaging in unprecedented monetary easing and money printing to rescue economies, all asset classes are likely to see nominal price increases. Bitcoin, often dubbed 'digital gold,' is positioned by many as a hedge against this inflation, though the effects of such policies manifest over the medium to long term.
For Bitcoin to reach a price target like $50,000—a 5-6x increase from its halving price—a significant inflow of capital is required. Estimates suggest that due to the market's leverage and the marginal pricing effect, the actual new capital needed to trigger such a move could be in the range of hundreds of billions of RMB, a substantial but not impossible figure, especially with growing institutional interest.
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The Immediate Impact on Bitcoin Mining
The most direct and immediate impact of the halving was felt by Bitcoin miners, whose block rewards were instantly cut in half. Profitability models shifted dramatically overnight.
Using an electricity cost of $0.038 per kWh and a Bitcoin price of $8,600, any miner with an energy efficiency worse than 57W/T (watts per terahash) immediately became unprofitable. This effectively puts a large portion of the network's older hardware, such as the Antminer S9 series, at a severe disadvantage.
While the reported network hashrate appeared stable or even slightly increased immediately after the halving, this metric is derived from block times and can be volatile in the short term due to luck. A more accurate picture emerges from examining the hashrate of individual public mining pools.
Data from the top 10 pools, representing about 74% of the network's total hashrate, showed almost universal declines, with some pools seeing hashrate drop by up to 20%. Extrapolating this suggests a total network hashrate drop of approximately 13% in the first 24 hours.
This mass migration of miners offline is expected to cause a slowdown in block production. The network's difficulty adjustment, which occurs roughly every two weeks, will eventually recalibrate to reflect the lower hashrate, making it easier for the remaining miners to find blocks and restoring profitability for some marginal machines.
Why didn't more miners turn off immediately? Several factors are at play:
- Variable Electricity Costs: The standard关机价 (shutdown price) calculation uses an average industry power cost. Miners with access to ultra-cheap electricity, particularly in regions entering the annual wet season with abundant hydro power, can continue operating less efficient machines profitably.
- Contractual Obligations: Many mining farms have committed to specific power loads with utilities and cannot simply shut down without penalty.
- Sunk Costs: Miners who have pre-paid for electricity for a month may choose to continue mining at a slight loss until their contract period ends rather than incur a total loss on the pre-paid power.
This migration to low-cost energy regions is a natural survival response. With wet season hydro-power rates as low as $0.022 per kWh, a much wider range of machines can remain profitable. However, this is a temporary reprieve. Once the wet season ends and electricity prices rise, the profitability squeeze will return.
This halving fundamentally strengthens the mining industry's characteristics of being long-cycle and capital-intensive. The ROI period for new hardware is greatly extended, and profit margins are thinner. This will likely accelerate industry consolidation, favoring large, well-capitalized operators with access to cheap, stable energy and cutting-edge equipment, potentially pushing smaller miners to the sidelines.
Frequently Asked Questions
What exactly happened during the Bitcoin halving?
The Bitcoin halving is a pre-programmed event that cuts the reward for mining new blocks in half. It occurs every 210,000 blocks, roughly every four years. The third halving in May 2025 reduced the block reward from 12.5 BTC to 6.25 BTC, slowing the rate of new Bitcoin entering circulation.
Will the Bitcoin price definitely go up now that the halving has happened?
Not necessarily in the short term. While the halving reduces Bitcoin's inflation rate, its price is influenced by many factors, including broader market sentiment, global macroeconomic conditions, and regulatory developments. Historically, major bull runs have started months after the halving and were coupled with significant technological or adoption innovations.
How does the halving affect ordinary Bitcoin investors?
For long-term investors (HODLers), the halving reinforces Bitcoin's value proposition as a scarce, disinflationary asset. The advice from many analysts is to focus on accumulating Bitcoin现货 (spot Bitcoin) without using high leverage, to set stop-loss and take-profit orders, and to prepare for continued volatility rather than expecting an immediate, dramatic price explosion.
Why did some miners continue operating even if it was unprofitable?
Miners with very low electricity costs, often from renewable sources during rainy seasons, may remain profitable even with older hardware. Others may have pre-paid for power and are mining at a slight loss to recoup some value from that sunk cost, waiting for the next network difficulty adjustment to improve their margins.
What was the impact on Bitcoin transaction fees and speed?
Despite predictions of potential network congestion due to a drop in hashrate, the Bitcoin network performed normally after the halving. Transaction fees and confirmation times did not spike significantly, as the mempool (the list of unconfirmed transactions) was not excessively full.
What is the key takeaway for someone interested in crypto?
The halving is a foundational event that highlights Bitcoin's unique monetary policy. However, sustainable growth is driven by utility and adoption. Focus on the long-term fundamentals, manage risk carefully, and 👉 view real-time tools and data to make informed decisions rather than reacting to short-term hype. The true test is whether the ecosystem can build the next wave of innovative applications that attract new users and capital.