Is Bitcoin’s Market Maturing? Cumulative Abnormal Returns and Volatility in the 2024 Halving and Past Cycles

This study examines how cumulative abnormal returns (CARs, the sum of abnormal returns over a period) and volatility behave around Bitcoin halving events, focusing on whether these patterns have evolved as the cryptocurrency market matures. Halvings are periodic events defined by Bitcoin’s algorithm, during which the reward—in the form of newly issued bitcoins—paid to miners for validating network transactions is reduced, impacting miners’ profitability and potentially influencing the asset’s price due to a decreased supply. To carry out the analysis, we collected data on returns and risk for the 2012, 2016, 2020, and 2024 halving events and compared abnormal returns before and around the event, focusing on the 2020 and 2024 halvings. The results reveal significant shifts in Bitcoin’s price behavior within the event window, with an increased occurrence of abnormal returns in 2020 and 2024, alongside variations in average return, volatility, and maximum drawdown across all events. These findings suggest that Bitcoin’s returns and volatility during halvings are decreasing as the cryptocurrency market becomes more regulated and attracts greater participation from institutional investors and governments.