Posted by Xoken.org – On April 20, the Bitcoin network experienced its fourth halving. With broad general economic implications, this process is important for the entire cryptocurrency world, and not just for Bitcoin holders.
The 2024 Bitcoin halving, which crypto investors have been waiting for four years, is over. The reward per block has been reduced from 6.25 BTC to 3,215 BTC.
The next cut will occur in 2028, which will reduce the reward to 1.5625 BTC. The 64th halving will occur around 2140, meaning 21 million coins have been mined, and the issuance of new Bitcoins will stop. Once this happens, miners will have to find other ways to make money in the crypto world.
How will the halving affect the price of Bitcoin?
When this article was written, the Bitcoin exchange rate was around $65,000. Many analysts expect the halving to lead to further increases in BTC prices in the long term.
Historically, every time a new cycle occurs following a halving event, Bitcoin’s price always reaches a new high. For example, in late 2013, about a year after the first halving, the price of Bitcoin reached $1,200. The next market cycle peaked at $20,000 per Bitcoin in late 2017, and soared to $69,000 in late 2021 before dropping again. However, over the past six months, the value of BTC has increased by approximately 140%. In comparison, over the same period, the price of Ethereum, the second largest cryptocurrency, rose by only 85%.
“The current situation is very unique: Bitcoin, for the first time, surpassed its previous peak before the halving, reaching $73,000 in March 2024,” said Kar Yong Ang, a financial analyst with Octa Brokers. He added that demand from a US bitcoin ETF launched in January was a major factor in the price increase.
At the same time, the miners’ income was reduced by exactly half. As a result, they need to spend double the time and electricity to earn the same amount of cryptocurrency. Since energy prices are not cheap, the weakest players are expected to leave the market. In other words, we expect a lack of supply with increasing demand.
Thus, the Bitcoin Halving is a significant event in the history of major cryptocurrencies, demonstrating its limited issuance and its mechanism to fight inflation.
Many believe that Bitcoin, with its deflationary properties, is well positioned to become a reliable store of value in an unstable world economy, like a digital version of traditional gold.
If we apply a historical parallel, Bitcoin will likely enter an intense growth phase in late 2024, where its price is expected to surpass $200,000. The current conditions are very different from those that occurred in 2020, because demand for cryptocurrencies is very high due to EFT, and the deficit is already being felt today.
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