Bitcoin’s blockchain experiences a significant event known as a “halving” which involves cutting the reward for mining in half. Currently, the network participants who validate transactions are given 6.25 bitcoins (BTC) for each successfully mined block, but this will be reduced to 3.125 during the next halving, predicted to happen in April or May of 2024. As the block reward approaches zero, the impact of each halving will gradually decrease over time.
What Is Bitcoin Halving?
The Bitcoin halving event is when the reward for mining new Bitcoin blocks is reduced by half, resulting in miners receiving 50% fewer Bitcoins for verifying transactions. This occurs every 210,000 blocks, which is approximately every four years.
Essentially, Bitcoin uses a synthetic form of inflation that halves every four years until all Bitcoin is released and is in circulation.
How Does Bitcoin Halving Work?
The functioning of Bitcoin halving is attributed to the blockchain technology software that governs the rate at which new Bitcoins are generated. The software mandates computers in the blockchain network to compete in validating transactions, known as Bitcoin mining.
Miners receive several new Bitcoins as a reward when they can demonstrate that the transactions they have selected are legitimate. These transactions are verified in groups called blocks, and the blockchain network is programmed to reduce the miners’ reward by half every 210,000 blocks.
What Is The Significance Of Bitcoin Halving?
The occurrence of Bitcoin halving results in a decrease in the number of new Bitcoins generated per block, leading to a reduction in the supply of new Bitcoins. Consequently, the coin’s purchase price surges as per the fundamental principles of Economics, where reduced supply and stable demand lead to higher prices.
Halving frequently precedes some of Bitcoin’s significant price surges as it curtails the supply of new coins while the demand remains stable.
What Is A Bitcoin Halving Chart?
A chart depicting Bitcoin halving is utilized to analyze the cryptocurrency’s inflation rate over a specific timeframe. Additionally, it demonstrates the reduction in Bitcoin’s inflation rates that occur with each halving.
What Is The Impact Of Bitcoin Halving On Bitcoin’s Price?
Although it has been suggested that Bitcoin halving could lead to higher prices, it is impossible to predict its impact on the future price of Bitcoin. Investors tend to rely on the price movements observed during the previous halving events as an indicator.
Post the upcoming halving events, the price of Bitcoin will be determined by the demand it garners in the market. It is essential to note that demand does not always translate into a price hike or even a steady price. The cryptocurrency market has matured significantly since the last halving event in 2016, and there is now a plethora of cryptocurrencies competing for users.
Bitcoin Halving Dates So Far
Let’s take a look at the previous Bitcoin halving events and patterns:
2012 Bitcoin Halving
The first halving happened on November 28th, 2012.
- New Bitcoin per block (Before): 50 BTC per block
- New Bitcoin per block (After): 25 BTC per block
- Price on Halving Day: $12.35
- Price 150 Days Later: $127.00
2016 Bitcoin Halving
The second halving occurred on July 9th, 2016.
- New Bitcoin per block (Before): 25 BTC per block
- New Bitcoin per block (After): 12.5 BTC per block
- Price on Halving Day: $650.63
- Price 150 Days Later: $758.81
2020 Bitcoin Halving
The third halving occurred on May 11, 2020.
- New Bitcoin per block (Before): 12.5 BTC per block
- New Bitcoin per block (After): 6.25 BTC per block
- Price on Halving Day: $8821.42
- Price 150 Days Later: $10,943.00
The Next Bitcoin Halving Dates: 2024 and Beyond
When is the Next Bitcoin Halving in 2024?
- Expected: May 01, 2024
- Block number: 740,000
- Block reward: 3.125 new BTC
- Total new Bitcoins: 656,250 BTC
When is the Next Bitcoin Halving in 2028?
- Expected: 2028
- Block number: 850,000
- Block reward: 1.5625 new BTC
- Total new Bitcoins: 328,125 BTC
What’s Different About the Bitcoin Halving in 2024?
– One of the primary distinctions of the fourth Bitcoin Halving is the reduction in the available supply of BTC:
The availability of supply for trading is a crucial factor in determining market scarcity. In the previous three Bitcoin Halvings, the supply of BTC available for trading consistently trended upward. However, in the journey towards the fourth halving, the trend has shifted to a prolonged downtrend. Bitcoin investors are no longer keeping BTC on exchanges as they did before.
The fourth Bitcoin Halving has created a scarcity mentality among the majority of investors due to the limited available supply. As a result, many analysts predict that this halving will be stronger than the previous ones.
Despite the journey to the fourth Bitcoin Halving being more than two-thirds complete, there is still a sense of optimism reflected in BTC’s trading price above $30,000 and BTC.D’s increase of over 50%.
– Halving doesn’t mean Bitcoin to uptrend:
The price trend after the halving can be divided into three stages:
- The first stage is characterized by a sharp rise in price, setting a new all-time high.
- The second stage sees a downturn in price.
- The third stage involves a recovery in price and a period of sideways movement until the next halving event.
Based on this evaluation, BTC is currently entering phase three. This indicates that BTC will not experience an immediate surge in price, but will instead continue with a prolonged period of sideways movement with large margins. The real increase in price will only occur after the halving event.
– Bitcoin price strategy before and after the 4th halving:
@Croesus_BTC has presented a daring price line projection for the next few years, which goes as follows:
- BTC price may require a significant amount of time to successfully break out of the $40,000 resistance area. During this period, the influence of adverse news may even trigger the depreciation of BTC.
- The uptrend will only commence after the halving event in 2024 and will continue until 2025. During this period, it is expected that BTC will reach a six-figure price.
Furthermore, with the record decline in available supply, a supply shock could trigger a significant surge in BTC.