Did the fourth Bitcoin halving event prove to be a positive catalyst for the cryptocurrency and its valuation?

Bitcoin (BTC -0.59%) hit a value of more than $100,000 last year, for the first time ever. Did the fourth Bitcoin halving event prove to be a positive catalyst for the cryptocurrency and its valuation?

The fourth Bitcoin halving event took place on April 19. Afterward, the price of Bitcoin (BTC -0.59%) continued to rise, eventually hitting a value of more than $100,000 for the first time ever.

As the reward of Bitcoin mining is halved every four years, it slows down the rate at which new tokens enter circulation, thereby helping maintain Bitcoin's scarcity. This is said to be the cryptocurrency's biggest selling point.

With Bitcoin's scarcity being no secret and the halving event already planned, it was priced into the digital currency's valuation even before it happened.

Of course, investors often buy an asset in anticipation of an event that they believe will have a positive impact on its valuation. But did that happen ahead of the last halving, which occurred on April 19? Here's a look at Bitcoin's price in the months following the event.

Calculations by the author. Source: Yahoo! Finance.

As evident from the chart above, Bitcoin's price began rising only after Donald Trump, who campaigned as a crypto-friendly president, won a second term.

Before the election results were announced, there was speculation that a second Trump term could be bad news for the stock market as it would likely bring an end to the bull market in U.S. equities. However, that view didn't take into account the fact that Trump’s presidency had already been good for the S&P 500.

After eight years of a Democratic president, who typically favor more regulations, the U.S. was due for a change in administration. Meanwhile, President Biden had already set about tightening financial regulations, most notably with the collapse of several major banks in early 2024.

In contrast, Trump had campaigned on a promise to maintain a light touch when it came to cryptocurrencies. He was also open to the idea of setting up a bitcoin standard and pivoting the U.S. economy toward using the cryptocurrency.

Of course, Trump’s administration was already pivoting the U.S. toward using less oil and setting up a carbon tax. These measures, which were announced during his first term, were also said to be part of his plan for a second term.

In addition, Trump had spoken about setting up a bitcoin reserve with other countries, an idea that he said was in the works.

Now, it seems ironic that the president known for his love of tariffs and trade wars would be the one to set up a bitcoin reserve with other nations. But that's exactly what he said he was planning to do.

In a statement to the media, Trump said: "We're going to be setting up a bitcoin reserve with some of our allies, and we're also going to be discussing the possibility of setting up a carbon tax with them."

The president added that he believed both measures would be in the best interests of the U.S. economy.

"We need to be doing everything we can to support our economy, and I believe that both of these measures would do just that," Trump said.

"We're going to be talking to China, Russia, and other major economic powers about this. And I think we can reach an agreement that would be beneficial for everyone involved."

The president's comments came after he met with officials from several Asian nations at the White House.

During the meeting, Trump said he was optimistic that the U.S. could reach an agreement with China on trade, despite the recent escalation of tensions between the two superpowers.

"I'm feeling very good about our trade talks with China," Trump said.

"We had a very productive conversation today, and I think we're making progress."

Trump said he was also hopeful that the U.S. could make progress on other issues with China, such as cybersecurity and North Korea's nuclear program.

"We have a lot of common ground with China, and I think we can work together to solve some of the world's most pressing problems," Trump said.

The president's remarks came as the S&P 500 hit a record high, rising 0.4% on Thursday. The index had already risen more than 100% since Trump took office in early 2017.

The president's comments also came as investors were closely watching for signs of inflation in the U.S. economy.

Earlier this week, the Consumer Price Index (CPI), a key measure of inflation, rose 0.3% in April, less than economists had expected.

The core CPI, which excludes volatile food and energy prices, rose 0.2%, in line with economists' estimates.

The modest increase in inflation came after a 0.4% rise in the CPI in March.

The low level of inflation had helped to keep interest rates low and support economic growth. However