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One year after its fourth halving, bitcoin shows a puzzling trajectory. Although the crypto has indeed risen since April 2024 — nearly reaching $109,000 in January — its growth remains pale compared to previous cycles. A paradox? Despite all-time highs, the annual growth rate caps at 49%, far from the quadruple digits of yesteryear. How to explain this historic slowdown, while ETFs and the programmed bitcoin shortage were supposed to propel the market?
In brief
- Bitcoin nearly reached $109,000, but its annual growth remains limited to 49%, far from previous cycles.
- High interest rates and post-Trump election volatility have slowed its momentum.
- Miners, facing record costs, are selling massively, weighing on bitcoin’s price.
- Despite spot ETFs, bitcoin now moves in a fragile balance between innovation and economic realities.
Bitcoin after the halving: a mixed review
In 2012, bitcoin leapt 8,000% one year after its first halving. In 2016, +277%, then +762% in 2020. This time, the crypto king struggles to exceed 50%. Yet, the fundamentals seemed in place: reduction of mining rewards from 6.25 to 3.125 BTC per block, approval of spot ETFs… But the macroeconomic context played spoilsport. “Interest rates have never been this high”, emphasizes Dessislava Aubert, analyst at Kaiko. A hostile environment for risky assets, bitcoin leading the pack.
Donald Trump’s 2024 election injected an unprecedented dose of volatility. While his inauguration propelled bitcoin to $109,000, fears related to his trade war and erratic economic policies subsequently eroded the gains. Investors, accustomed to monetary stability post-2008, now navigate troubled waters. Result: bitcoin oscillates between fleeting euphoria and chronic caution.
Miners themselves suffer a double penalty. The drop in rewards comes with record mining difficulty — synonymous with increased operational costs. “Farms have to sell more BTC to survive”, explains Curtis Harris from Compass Mining. A vicious circle: these massive sales curb the coin’s valuation while competition intensifies for ever slimmer margins.
Mining in peril: the other side of the coin
Faced with this hostile landscape, historical mining players are reinventing themselves. Optimizing energy costs, resorting to more efficient technologies… Survival requires drastic rationalization. “Those who hoped for a million-dollar bitcoin live in illusion”, asserts Shanon Squires, mining director at Compass Mining. The speculative expectation bubble has burst, giving way to harsh realism.
The arrival of spot ETFs in January 2024 was supposed to attract institutional capital, offsetting retail slowdown. But the effect was mixed. While these products have drawn billions, their impact on price is limited by forced sales from miners and fund outflows during geopolitical crises. ETFs are no longer a lifeline, but one element among others in a fragmented ecosystem.
Bitcoin matures, as do its cycles. The halving is no longer a simple bubble-triggering algorithm but an event drowned in a sea of external variables. Key interest rates, monetary policies, geopolitical tensions… Cryptocurrency evolves in a world where every gain must be earned. It remains to be seen whether this new maturity heralds stabilization… or slow erosion.
Bitcoin is undergoing a painful metamorphosis. Its 2024 halving revealed its vulnerability to external shocks but also its resilience. Between miners seeking profitability and investors on constant alert, BTC now embodies a fragile balance between financial innovation and economic reality. A lesson for crypto purists: even decentralized, bitcoin does not live outside the world.
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Fascinated by Bitcoin since 2017, Evariste has continuously researched the subject. While his initial interest was in trading, he now actively seeks to understand all advances centered on cryptocurrencies. As an editor, he strives to consistently deliver high-quality work that reflects the state of the sector as a whole.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
