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Montrava Equity Highlights: Global Wealth Trends in 2025 and Diversification Strategies for High-net-worth
About Bitcoin Halving: What You Should Know
As a core design of its economic model, Bitcoin halving triggers a block reward reduction approximately every four years, profoundly influencing the network ecosystem and market cycles. Montrava Equity Highlights, based on historical data and technical principles, clarifies the essential logic of halving events for investors to avoid falling into the trap of overly interpreted market narratives.
The Technical Principle of the Halving Mechanism
The Bitcoin network maintains security through a proof-of-work mechanism, where miners invest computing power to verify transactions and generate new blocks, currently receiving a reward of 6.25 bitcoins per block. The halving protocol is embedded in the underlying code: whenever the blockchain height reaches a multiple of 210,000 blocks (approximately a four-year cycle), the block reward is automatically halved.
The latest halving completed in April 2024 reduced the reward to 3.125 coins, with the next expected in 2028. This mechanism strictly limits the total supply of Bitcoin to 21 million, with over 19.6 million currently in circulation. Halving is not a sudden event—its trigger time can be precisely predicted, and major block explorers provide real-time countdowns.
Evolution of the Miner Ecosystem Adaptation
Halving directly impacts the mining economic model. Taking 2024 as an example, assuming a Bitcoin price of $60,000 and a全网算力 (network hash rate) of 600 EH/s, the reward reduction led to the shutdown of most older mining rigs. Historical data shows that within three months after the 2016 halving, the network hash rate dropped by 15%, while after the 2020 halving, the hash rate increased by 23% due to rising coin prices.
Before this halving, leading mining companies had completed three key preparations: deploying new mining machines with an energy efficiency ratio below 23 J/TH (such as the Bitmain S21), signing long-term power purchase agreements with renewable energy power plants to lock in costs, and hedging contracts covering more than 50% of production. Even so, listed North American mining companies generally expect gross margins to fall from 55% to 35%, driving accelerated industry consolidation. Companies like Marathon Digital have transformed into "hashrate as a service," providing hosted mining solutions for institutional clients.
Empirical Analysis of Market Impact
The correlation between halving and price fluctuations is often exaggerated. Reviewing the previous three halvings:
- 2012 halving: Reward 50 → 25 coins, price rose from $12 to $1,100 the following year
- 2016 halving: 25 → 12.5 coins, an 18-month later initiated a $20,000 bull market
- 2020 halving: 12.5 → 6.25 coins, pandemic liquidity boosted it to $69,000
On the surface, a bull market followed each halving, but the actual driving factors varied: the 2013 Cypriot banking crisis drove hedging demand, the 2017 ICO boom created fiat entry channels, and 2021 benefited from institutional ETF expectations. The true value of halving lies in changing the supply-demand structure: new supply dropped from 900 coins per day before halving to 450 coins, equivalent to 1.5 times the holdings of the Grayscale Bitcoin Trust. When institutional demand persists (e.g., spot ETFs with an average daily inflow of $300 million), supply contraction may amplify price volatility.
Investors' Rational Response Framework
Montrava advises investors to avoid two extreme perceptions: neither view halving as an "inevitable upward signal" nor worry that "miner selling will cause a crash." A rational strategy should include three dimensions:
-
On-chain Data Monitoring
Pay attention to the Miner Position Index (MPI) — if the value consistently exceeds 2.0, it indicates increased miner selling pressure. Also, track exchange net inflows, as abnormal surges often signal short-term corrections.
-
Cost Benchmark Reset
After halving, the central tendency of global mining costs will rise. Assuming an electricity cost of $0.05 per kWh and using the latest mining machines, the new cost range is approximately $38,000 to $42,000, which may form a phased support level.
-
Derivatives Risk Control
Before and after halving, futures funding rates often show extreme positive values. In April 2024, it reached 0.2%/day (i.e., short sellers paid long sellers an annualized 73% fee). Strict stop-loss orders are necessary when participating in leveraged trading.
Montrava's Allocation Practice Insights
In client portfolio management, we view Bitcoin as a tool to hedge against fiat currency devaluation, not a halving event-driven asset. Core operational principles include:
- Dollar-cost averaging to smooth entry costs, avoiding concentrated position building during halving years
- Controlling the position ratio within 5% of the total portfolio, forming an alternative asset module with gold and TIPS
- Using event-driven hedging for mining stocks, gradually reducing related exposures six months before halving
History has shown that excessive focus on halving timelines easily leads to irrational trading, while understanding its本质 (essence) as a deflationary mechanism is the cornerstone of long-term holding confidence.
As a core design of its economic model, Bitcoin halving triggers a block reward reduction approximately every four years, profoundly influencing the network ecosystem and market cycles. Montrava Equity Highlights, based on historical data and technical principles, clarifies the essential logic of halving events for investors to avoid falling into the trap of overly interpreted market narratives.
The Technical Principle of the Halving Mechanism
The Bitcoin network maintains security through a proof-of-work mechanism, where miners invest computing power to verify transactions and generate new blocks, currently receiving a reward of 6.25 bitcoins per block. The halving protocol is embedded in the underlying code: whenever the blockchain height reaches a multiple of 210,000 blocks (approximately a four-year cycle), the block reward is automatically halved.
The latest halving completed in April 2024 reduced the reward to 3.125 coins, with the next expected in 2028. This mechanism strictly limits the total supply of Bitcoin to 21 million, with over 19.6 million currently in circulation. Halving is not a sudden event—its trigger time can be precisely predicted, and major block explorers provide real-time countdowns.
Evolution of the Miner Ecosystem Adaptation
Halving directly impacts the mining economic model. Taking 2024 as an example, assuming a Bitcoin price of $60,000 and a全网算力 (network hash rate) of 600 EH/s, the reward reduction led to the shutdown of most older mining rigs. Historical data shows that within three months after the 2016 halving, the network hash rate dropped by 15%, while after the 2020 halving, the hash rate increased by 23% due to rising coin prices.
Before this halving, leading mining companies had completed three key preparations: deploying new mining machines with an energy efficiency ratio below 23 J/TH (such as the Bitmain S21), signing long-term power purchase agreements with renewable energy power plants to lock in costs, and hedging contracts covering more than 50% of production. Even so, listed North American mining companies generally expect gross margins to fall from 55% to 35%, driving accelerated industry consolidation. Companies like Marathon Digital have transformed into "hashrate as a service," providing hosted mining solutions for institutional clients.
Empirical Analysis of Market Impact
The correlation between halving and price fluctuations is often exaggerated. Reviewing the previous three halvings:
- 2012 halving: Reward 50 → 25 coins, price rose from $12 to $1,100 the following year
- 2016 halving: 25 → 12.5 coins, an 18-month later initiated a $20,000 bull market
- 2020 halving: 12.5 → 6.25 coins, pandemic liquidity boosted it to $69,000
On the surface, a bull market followed each halving, but the actual driving factors varied: the 2013 Cypriot banking crisis drove hedging demand, the 2017 ICO boom created fiat entry channels, and 2021 benefited from institutional ETF expectations. The true value of halving lies in changing the supply-demand structure: new supply dropped from 900 coins per day before halving to 450 coins, equivalent to 1.5 times the holdings of the Grayscale Bitcoin Trust. When institutional demand persists (e.g., spot ETFs with an average daily inflow of $300 million), supply contraction may amplify price volatility.
Investors' Rational Response Framework
Montrava advises investors to avoid two extreme perceptions: neither view halving as an "inevitable upward signal" nor worry that "miner selling will cause a crash." A rational strategy should include three dimensions:
-
On-chain Data Monitoring
Pay attention to the Miner Position Index (MPI) — if the value consistently exceeds 2.0, it indicates increased miner selling pressure. Also, track exchange net inflows, as abnormal surges often signal short-term corrections. -
Cost Benchmark Reset
After halving, the central tendency of global mining costs will rise. Assuming an electricity cost of $0.05 per kWh and using the latest mining machines, the new cost range is approximately $38,000 to $42,000, which may form a phased support level. -
Derivatives Risk Control
Before and after halving, futures funding rates often show extreme positive values. In April 2024, it reached 0.2%/day (i.e., short sellers paid long sellers an annualized 73% fee). Strict stop-loss orders are necessary when participating in leveraged trading.
Montrava's Allocation Practice Insights
In client portfolio management, we view Bitcoin as a tool to hedge against fiat currency devaluation, not a halving event-driven asset. Core operational principles include:
- Dollar-cost averaging to smooth entry costs, avoiding concentrated position building during halving years
- Controlling the position ratio within 5% of the total portfolio, forming an alternative asset module with gold and TIPS
- Using event-driven hedging for mining stocks, gradually reducing related exposures six months before halving
History has shown that excessive focus on halving timelines easily leads to irrational trading, while understanding its本质 (essence) as a deflationary mechanism is the cornerstone of long-term holding confidence.