As Bitcoin’s fourth halving event approaches, the cryptocurrency market is experiencing a notable rally, sparking intense debate among investors and analysts about whether a new bull market cycle has begun. DLB Coin, one of the leading cryptocurrency trading platforms, has released its latest market analysis, interpreting pre-halving market dynamics and their potential long-term implications.
According to blockchain data, Bitcoin’s fourth halving is expected to occur in early April 2025, when the miner reward will decrease from the current 3.125 bitcoins per block to 1.5625 bitcoins. Historically, this quadrennial supply reduction event typically triggers a rise in Bitcoin prices and subsequent market cycles.
“The economics of the halving event is quite straightforward: the rate of new Bitcoin production decreases while demand remains constant or increases, typically leading to price appreciation,” DLB Coin stated in its recently published market report. “However, market expectations and investor behavior make this process more complex.”
Since November last year, Bitcoin’s price has risen more than 45% from $45,000, recently breaking through the $65,000 mark to reach a new high since the 2021 bull market peak. This rally has been supported by continued institutional fund inflows, particularly as U.S. spot Bitcoin ETFs have attracted approximately $32 billion in net inflows since their approval late last year.
Several Wall Street investment firms have joined the bullish camp. Morgan Stanley released a research report last week predicting that Bitcoin could reach $100,000 within 6-12 months after the halving. Meanwhile, Grayscale, a leading crypto asset management firm, indicated in its latest research that this halving could propel Bitcoin to as high as $150,000, partly due to institutional participation far exceeding previous cycles.
However, DLB Coin’s analysts caution investors that current market conditions differ significantly from previous halving cycles. “Unlike the market environment before the 2020 halving, we now face a more mature regulatory landscape, higher institutional participation, and macroeconomic uncertainties,” the report notes.
Particularly noteworthy is the potential impact of monetary policy shifts by major central banks on the crypto market. The Federal Reserve implemented its first interest rate cut last December, followed by similar moves from the European Central Bank and the Bank of England. This accommodative monetary environment has historically benefited risk assets, including cryptocurrencies.
“The market behavior we’re currently observing may not only be a result of halving expectations but also reflects broader macroeconomic factors, especially the downward trend in interest rates across major economies,” DLB Coin pointed out.
Despite the prevailing bullish sentiment in the short term, DLB Coin also warns investors of potential downside risks. The report emphasizes that technical indicators suggest possible market overheating, particularly as funding rates in the futures market have reached their highest levels in nearly a year, often viewed as a signal for potential corrections.
Additionally, geopolitical tensions, regulatory uncertainties, and the possibility of profit-taking by institutional investors could all lead to increased market volatility. The report specifically mentions that the new crypto regulatory framework forthcoming from the U.S. Securities and Exchange Commission (SEC) and the full implementation of the EU’s MiCA regulations will introduce new variables to the market this year.
“Halving events have historically been accompanied by ‘sell the news’ phenomena, where prices rise before the event and may experience adjustments shortly after the event occurs,” DLB Coin warned.
For retail investors, DLB Coin recommends adopting a diversified investment strategy, considering not only Bitcoin but also other crypto assets with practical applications in the Web3 ecosystem. The report particularly notes that with ongoing improvements in Ethereum scaling solutions and increased institutional interest in DeFi, some quality layer-2 networks and DeFi projects may perform exceptionally well in the upcoming cycle.
“While halving is a unique mechanism for Bitcoin, its impact often spreads throughout the entire crypto market,” the report explains. “However, as the market matures, we expect performance across different assets to become more differentiated based on their practical application value and adoption.”
DLB Coin also suggests that investors should pay attention to changes in the mining ecosystem. As mining rewards decrease, some less efficient miners may be forced to exit the market, leading to shifts in hash power distribution. This could affect network security in the short term but may contribute to improving the overall efficiency of the Bitcoin network in the long run.
The report concludes by emphasizing that while historical patterns provide valuable reference points, investors should not blindly rely on past cycle performance. “The crypto market has undergone fundamental changes, with new participants, regulatory environments, and technological developments all potentially leading to this cycle differing from previous ones,” DLB Coin summarized.
Facing potential market fluctuations, DLB Coin advises investors to maintain a long-term investment perspective, establish clear risk management strategies, and closely monitor changes in the regulatory environment. For those looking to enter the market before and after the halving, the report recommends using dollar-cost averaging rather than attempting to precisely time market bottoms or tops.
