The decline of the Bitcoin halving myth: The market has entered a new era in 2026

The four-year halving event has long been considered the “law” among crypto investors, but the performance after the fourth halving in 2024 is profoundly rewriting this enduring narrative.

In April 2024, Bitcoin completed its fourth halving, reducing the block reward from 6.25 to 3.125. Historically, a bull market peak has been expected 12 to 18 months after halving. However, by January 2026, over 21 months since the halving, the anticipated $150,000 to $250,000 prices have not materialized. Currently, BTC hovers around $91.35K, up only 38% from the $63,000 at halving, starkly contrasting with the hundreds-fold increases seen in previous cycles.

This is not a failure of the halving mechanism but a fundamental shift in market structure unfolding.

The Perfect Data of Historical Cycles vs. Harsh Reality

Bitcoin halving logic appears flawless: supply reduction → scarcity increase → price rise. Historical records have perfectly illustrated this economic principle:

• 2012 halving: 18 months later, BTC surged to $1,150, a 9,483% increase
• 2016 halving: 18 months later, BTC reached $19,700, a 2,931% increase
• 2020 halving: 18 months later, BTC soared to $69,000, a 702% increase
• 2024 halving: 21 months later, BTC is at $91.35K, up 38%

The data series clearly reveals a pattern: marginal effects are diminishing, and each halving cycle’s expected gains are weakening.

More notably, in March 2024, BTC had already surpassed its previous all-time high of $71,000. This indicates the market had already priced in the halving expectations early, turning the actual halving event into a “profit realization” turning point.

From Retail Sentiment-Driven to Institutional Rational Pricing

A crucial but often overlooked turning point in January 2024 was the approval of Bitcoin spot ETFs in the US. This marked a fundamental shift in Bitcoin’s market structure.

In the old cycle, retail investors were the main participants: chasing gains in euphoric phases, panic selling during downturns, and the scarcity narrative of halving most easily triggering collective speculation, thus driving prices sharply higher.

The new era’s dominant players are institutional capital: over 1.5 million BTC are held by institutions, and Wall Street’s pricing power far exceeds that of retail consortia. Institutional investors’ decision-making logic is entirely different—they focus on Federal Reserve policies, inflation data, geopolitical situations, viewing Bitcoin as part of asset allocation rather than a short-term speculative tool.

Under this structure, halving is just one of many macro variables, with its independent driving force significantly weakened.

The Marginal Effect Shift Driven by Bitcoin Ecosystem Evolution

Since 2023, the internal dynamics of the Bitcoin ecosystem have undergone qualitative changes:

Inscriptions and Assetization: The Ordinals protocol has stimulated on-chain activity, with transaction fee revenue once accounting for over 40% of miners’ total income, breaking the dominance of block rewards.

Layer 2 Scaling Ecosystem: Solutions like BEVM, BOB, RGB++ have attracted substantial funding. BTC is evolving from “digital gold” to an “ecosystem platform,” beginning to compete with Ethereum in DeFi, NFTs, and other application scenarios.

Reshaping Miner Revenue Structure: The importance of block rewards relative to transaction fees has declined, with fee revenue steadily increasing. This means the actual impact of halving on miners is weakening, and its stimulative effect on prices diminishes accordingly.

The ecosystem’s richness and maturity have instead broken the simple logic of “halving must lead to a rise.”

Three Possible Paths in 2026

Path 1: Low-probability event of delayed rebound

If a strong catalyst emerges—such as global central banks adopting Bitcoin as strategic reserves, a global monetary crisis triggering safe-haven demand, or major breakthroughs in Bitcoin application scale—BTC could rally to $150,000–$200,000. But at that point, the upward momentum would stem from a new narrative, not halving effects. Probability estimate: 15-20%.

Path 2: The mature asset era (most aligned with current reality)

This is the most realistic development: BTC is transforming from a “speculative asset” into a “portfolio asset.”

• Price range narrows to $80,000–$120,000
• Annual volatility drops from 80% to 30-40%
• Annual returns stabilize at 20-30%, comparable to S&P 500 tech stocks
• The legend of overnight riches fades, but institutional-grade allocation value is gained

For speculators dreaming of quick wealth, this future is most disappointing. But for institutional portfolio managers, this is the ideal alternative asset characteristic. Currently, market dominance lies with the latter. Probability estimate: 60-65%.

Path 3: Black swan event of systemic risk

If in 2026, a major systemic shock occurs—such as strict US regulation of crypto assets, Fed resuming rate hikes due to inflation, or a global financial crisis—BTC could fall below $60,000, even testing the Realized Price (~$55,000), the ultimate support level. This would thoroughly end the “halving cycle” investment narrative. Probability estimate: 15-20%.

Redefining Investment Strategies

Relying on the outdated “halving cycle” script will be ruthlessly punished by the 2026 market.

A new market logic requires investors to make the following adjustments:

Face reality: the marginal diminishing effect of halving has reached its limit. From 9,483% → 2,931% → 702% → 38%, the marginal effect is exhausted. Continuing to wait for “halving surge” may lead to fruitless stagnation.

Shift to macro-driven factors: Federal Reserve meetings, CPI releases, ETF fund flows, major economic policies—these are the real variables influencing BTC. Halving has become just a background setting.

Recalibrate return expectations: If BTC truly evolves into a mature asset, a 20-30% annual return is excellent. No longer should one expect tenfold gains in a year.

Build diversified allocations: Spread across BTC, Ethereum, high-potential sectors, stablecoin yield farming, etc., to avoid putting all bets on a single narrative.

Conclusion: From Legend to Reality

The Bitcoin halving cycle is not entirely invalidated but its driving power is experiencing a historic weakening. This should not be seen as a tragedy but as a form of maturity—a necessary process of an asset evolving from speculative to allocative.

From geek experiments to one of the top ten global assets, from payment visions to digital gold and then to an ecosystem platform, Bitcoin has never developed according to a fixed script. In 2026, we stand at another turning point:

• The halving cycle downgrades from “sacred grail” to “reference variable”
• The legend of “four-year bull markets” has become a historical relic
• BTC’s identity shifts from a speculative tool to a portfolio asset

Understanding this transition and adapting to new driving logic—institutional allocation, sovereign assetization, macro cycle interactions—investors can still profit in this new era. But the prerequisite is to abandon the old map.

The market will show no mercy to those holding outdated maps in search of new continents.