As the market nears Bitcoin's fourth halving on April 19, let's examine five intriguing facts about this event that might surprise even the most knowledgeable crypto-enthusiasts.

Every four years, the Bitcoin community marks the Bitcoin halving. Many BTC market analysts see this as a significant milestone event due to its historically positive impact on the cryptocurrency market.

As the market draws closer to Bitcoin's fourth halving on April 19, let's explore five captivating facts about this event that even experienced crypto-enthusiasts might not know.

Bitcoin's price has increased by over 650,000% since the first halving

Historically, Bitcoin's price has risen following a halving, primarily due to changes in supply and demand.

Historical data shows that after Bitcoin’s first halving on Nov. 28, 2012, its price went from $11 to a record high of $1,240 a year later. Similarly, after the second halving in July 2016, Bitcoin's price jumped from around $650 to a new record high of $20,000 in December 2017.

In May 2020, after the third halving, Bitcoin's price soared from around $8,800 to nearly $69,000 in November 2021. Bitcoin's gains since the first halving amount to an extraordinary 650,000%.

Various factors have boosted demand for Bitcoin following its halving events. For instance, the generally dovish approach by global central banks during 2020-2021 played a significant role in Bitcoin's price surge.

Halvings challenge miners' economic sustainability

Each halving reduces miners' revenue for validating transactions, making profitability more challenging, particularly for those with higher operational costs. This scenario forces miners to either upgrade to more efficient technology or cease operations.

After the third Bitcoin halving in May 2020, the average cost to mine one BTC increased, as the blue wave in the chart below indicates.

The rise in operational costs drove smaller players out of the market, potentially increasing network centralization.

Pre-halving price rallies may be speculative

Anticipation of a Bitcoin halving often leads to speculative price increases.

For example, in the six months leading up to the 2020 halving, Bitcoin's price rose by over 40%, from around $7,000 in November 2019 to approximately $10,000 by May 2020.

These gains are often fueled by speculative investors looking to benefit from the post-halving price increase, reflecting historical trends and resulting in volatility.

The theory behind post-halving price increases is based on a supply shock. Each of the first three halvings reduced the daily Bitcoin production from 50 to 25 to 12.5, and most recently in 2020, to 6.25 BTC per block. This reduction can trigger significant price movements if demand remains strong.

For instance, the year after the 2016 halving saw nearly a 300% increase in Bitcoin's price, partly due to this supply shock.

Macroeconomic influence on Bitcoin halving cycles

The broader economic context significantly shapes the impact of Bitcoin halvings on its price.

For example, the 2020 halving happened during a time of loose monetary policies, including near-zero interest rates in the U.S. This situation bolstered Bitcoin's appeal as "digital gold," helping its price soar from around $8,000 during the halving in May 2020 to a record high of nearly $69,000 by November 2021.

Last Bitcoin halving will take place next century

Thanks to the halving process, the final Bitcoin is expected to be mined around 2140. After the last halving, miners will no longer receive block rewards in new BTC and will depend solely on transaction fees for revenue.

This transition could significantly alter Bitcoin's security and economic model, impacting everything from miner participation to transaction costs.