Bitcoin is on the brink of a “halving” event, anticipated to occur within the next day or two. This predetermined occurrence, established by bitcoin’s creator, Satoshi Nakamoto, aims to cut in half the reward granted to miners of the digital currency. The objective is to decrease the influx of new bitcoins into the market, heightening its scarcity.
Speculation abounds that this halving could trigger increased demand, potentially driving up Bitcoin‘s price, which has already seen a significant uptick of nearly 50% since the beginning of the year. Much of this surge is attributed to the successful introduction of spot bitcoin ETFs, authorized by U.S. regulators in January.
Here’s a breakdown of what to expect from Bitcoin’s impending halving:
What does “halving” entail?
Currently, bitcoin miners receive a fixed reward of 6.25 bitcoins for validating a new block on the Bitcoin blockchain. Post-halving, this reward will halve to 3.125 bitcoins. Consequently, the rate of new bitcoins entering circulation will decrease, reducing the overall supply. As per Nakamoto’s limits, the total number of bitcoins will never exceed 21 million, with over 19.5 million already mined, leaving less than 1.5 million to be generated.
When was the last halving?
The previous halving occurred in May 2020, coinciding with Bitcoin’s price at approximately $8,602. By May 2021, bitcoin’s value had skyrocketed to nearly $57,000.
When is the next halving expected?
Halving events occur approximately every four years, following the addition of every 210,000 “blocks” to the blockchain. While specific dates are not fixed, projections indicate the next halving could transpire late Friday or early Saturday.
What could happen to Bitcoin’s price post-halving?
Opinions vary, with some experts considering it a non-event due to the anticipated impact being priced in advance. Others anticipate a potential price surge, fueled by growing demand from new ETFs and the supply reduction from halving. Predictions range from more conservative estimates around $100,000-$175,000 to more bullish projections exceeding $400,000.
How will the halving affect Bitcoin miners?
Miners may face pressure to enhance energy efficiency or secure additional funding. Previous halving events have initially led to declines in miner revenue, followed by significant rebounds over time, driven by Bitcoin’s price appreciation and expansions by larger mining operations.
As the next halving approaches, the resilience and adaptability of mining companies will likely come to the fore, guided by technological advancements and market dynamics.
