Bitcoin halving 2024

Bitcoin has become a real sensation in the financial world. Its price and popularity are growing every year, attracting the attention of both experienced investors and beginners. Despite the fact that Bitcoin is digital money, it cannot be created indefinitely. Verifiable scarcity is the basis of its value proposition. Two concepts responsible for this scarcity are at the heart of the Bitcoin protocol. First, there are only 21 million Bitcoins in existence. It is impossible to create additional Bitcoins under any circumstances. Second, the number of new Bitcoins added to the network decreases by half about every four years. This second concept is called halving. 

What is the Bitcoin halving?

Bitcoin halving is an event that occurs when a certain block in the blockchain is reached. For every 210,000 blocks, the reward for Bitcoin miners is halved. This happens about every four years and helps control the distribution of BTC, curb inflation, and perform other important functions that are integral to the philosophy of the cryptocurrency world. 

Understanding the Halving Mechanism

The algorithms of cryptocurrencies such as Bitcoin do not allow the printing of an infinite amount of money. Bitcoin’s emission is limited to 21,000,000 coins, and due to the halving mechanism in the Bitcoin network, the supply of coins magnifies progressively and is noticeably slower than the growth rate of demand for them. Moreover, halving has a direct influence on the Bitcoin mining level of complexity As the reward for mining decreases, miners face increased competition for new blocks. This, in turn, boosts the difficulty of mining and requires more resources from miners, including energy and hardware power. The halving mechanism is embedded in Bitcoin’s source code and is activated after every 210,000 blocks. It divides the amount of miners` reward by half. Thus, the number of new BTC coins in circulation is gradually reduced, which leads to higher prices and helps to avoid a sharp intensification in their volume on the market.

At the same time, it gives miners an incentive to work for a long time, until 21 million coins are mined. 

Historical Context: Previous Bitcoin Halvings

The first block of the Bitcoin blockchain, also known as the “Genesis Block” or “Block 0”, was mined on January 3, 2009, by the coin’s creator known as Satoshi Nakamoto, who set the initial block reward at 50 BTC. Since Bitcoin had no monetary value in those days, there was no real incentive to participate in mining, and Satoshi was just about the only miner. 

The first halving occurred on November 28, 2012. The amount of Bitcoins awarded to miners for confirming each block of transactions was reduced from 50 to 25 BTC. At first, it had no noticeable effect on the BTC price, but the value of the coin began to go up constantly from around $11 in November 2012 to $1,100 in November 2013. This was followed by a prolonged price fall, dropping to $152 on January 14, 2015. Finally, in October 2015, 9 months before another halving, it started to rise steadily again. During this period, Bitcoin was still a relatively new concept. The market was ruled mostly by retail investors and early adopters who discerned the potential of a decentralized digital currency. 

The second halving occurred on July 9, 2016, when the reward dropped from 25 to 12.5 BTC. The crypto community had been eagerly awaiting this date. In 2016, Bitcoin went from $650 in July 2016 to nearly $20,000 in December 2017. Market sentiment during this period was predominantly bullish. The increased media attention to the cryptocurrency industry, the vogue for initial coin offerings (ICOs), and the arrival of institutional investors contributed to this. 

The third halving occurred on May 11, 2020, when the reward decreased from 12.5 to 6.25 BTC. As a result, Bitcoin jumped from around $9,000 in May 2020 to an all-time high of $69,000 in November 2021. The 2020 halving was characterized by increased institutional interest. At this time, large corporations and investment funds entered the cryptocurrency market. The COVID-19 pandemic also played a significant role in shaping market sentiment. Monetary authorities turned on the printing presses and flooded the financial system with money to stem the global economic downturn. However, these measures raised fears of inflation and currency devaluation and increased the appeal of Bitcoin as a tool for inflation protection and capital preservation. 

The next Bitcoin halving 2024 is expected in April of the year to come. Commentators predict that the halving will result in a significant change in the fee of BTC, as has happened during previous episodes. Institutional investors affect the market to a large extent. The Bitcoin rate and the fate of the entire cryptocurrency market will largely depend on how they react to the halving. 

How the halving affected the Bitcoin market

Bitcoin halving is often accompanied by BTC price fluctuations. Some studies show that in the past, halvings have often been preceded by sharp increases in BTC value, although this is not guaranteed.

Bitcoin halving has several significant impacts on the cryptocurrency and the market as a whole as follows: 

• The halving reduces the rate at which new Bitcoins are issued, which leads to less inflation on the network. 
• The decreasing reward per block reinforces Bitcoin’s scarcity. 
• The halving can have an impact on miners who make money from mining new blocks. A lowering in the reward per block can lead to a fall in the profitability of mining, especially for small and less efficient miners. 

Bitcoin halving is often accompanied by BTC price alterations. Some studies show that in the past, halvings have often been preceded by sharp increases in BTC value, although this is not guaranteed. If we estimate the price dynamics in three bitcoin halving cycles over a two-year period beginning one year before each halving and ending one year after, we can get an idea of the trajectory of the BTC value as the fourth halving approaches. Over such a two-year period, BTC appreciation was about 30,000% in 2012, 786% in 2016, and 712% in 2020. If Bitcoin shows the same performance as in the last two periods, its price could reach the $220k mark in 2025.

Despite the previous trends, it is important to understand that market behavior can be unpredictable. Future halvings may not lead to the same results, especially given the ever-changing nature of the cryptocurrency market. Also, many traders know that altcoin prices are correlated to the BTC exchange rate: if Bitcoin jumps in value, most altcoins will follow. Therefore, a halving in the Bitcoin network causes not only the first cryptocurrency to rise but also other assets. Based on this, an interesting option to capitalize on Bitcoin’s halving can be investing in altcoins. Often, the growth rate of altcoins is much higher than that of Bitcoin. 

Bitcoin halving 2024 prediction

When is Bitcoin halving 2024? The next BTC halving is expected in the spring of 2024 when the reward per block will drop to 3.125 BTC. Depending on how the network reacts to this event, the following event will either further solidify Bitcoin as the leading cryptocurrency or pave the way for new potential cryptocurrency networks to displace it from its pedestal. Most experts believe that the BTC price will rise as a reduction in the reward per block will make coin mining more difficult and expensive while reducing the number of new Bitcoins entering the market. However, other factors such as cryptocurrency regulation, changes in blockchain technology, and the general state of the global economy could also play a role. Analysts at JP Morgan claim that Bitcoin will hit the $45,000 mark amid the halving of 2024. Layah Heilpern, a crypto investor with an audience of over 600k Twitter (X) subscribers, believes the BTC value will reach the $75,000 value. As per Bitcoin halving price prediction 2024 by Robert Kiosaki, an author of the bestseller Rich Dad, Poor Dad, the Bitcoin rate will amount to $120,000 per coin. 

FAQ

When is the next Bitcoin halving?

Bitcoin halving happens every four years. The Bitcoin halving date 2024 is on the way and will happen on block number 840,000 around the spring of the following year.  

How can 2024 Bitcoin halving affect Bitcoin supply?

Halving declines the number of new Bitcoins generated by a block, thus reducing its supply in the market. In traditional markets, a commodity with reduced supply and high demand usually increases in value, which is why halving is considered one of the main catalysts of a bull rally. It should be noted that immediately following a halving, Bitcoin volatility may strengthen. This could happen due to changes in the behavior of traders and investors, as well as the potential exit of some miners whose equipment will become unprofitable at the new block reward. Thus, while a Bitcoin halving in 2024 is likely to cause excitement in the cryptocurrency market, its full implications remain a matter of speculation. 

Will Bitcoin halving continue indefinitely?

Satoshi Nakamoto programmed halving in the Bitcoin network every 210 thousand blocks, i.e. every 4 years until the moment when with the mining of 21 million coins the issue of cryptocurrency will be finished. Bitcoin halving will go on for decades to come. The rewards will get smaller and smaller, which means the project will never reach its last Satoshi. Obviously, mining will continue as long as there are people willing to mine coins, but at some point, the rewards will simply become unprofitable. However, this won’t happen for a few more decades, or maybe even more than a century, if Bitcoin doesn’t cease to exist at that point. By some estimates, mining will continue until 2140. But by then, the cryptocurrency industry will have completely transformed the world, as will the solution to this problem.

Disclaimer: Please keep in mind that the content of this article is not financial or investing advice. The information provided is the author’s opinion only and should not be considered as direct recommendations for trading or investment. Any article reader or website visitor should consider multiple viewpoints and become familiar with all local regulations before cryptocurrency investment. We do not make any warranties about reliability and accuracy of this information.