Bitcoin Halving: What You Need to Know for the 2024 Event

With the next Bitcoin halving less than a year away, it’s crucial to understand what it is and how it could affect the world’s flagship cryptocurrency.

Bitcoin was invented in 2008 by an unknown person or group of people who used the name Satoshi Nakamoto. The Bitcoin blockchain’s first block, referred to as “Block 0” or “Genesis Block”, was mined by Satoshi on January 3, 2009. At the inception of Bitcoin, the first block reward was set at 50 BTC, and since Bitcoin did not have any monetary value, Satoshi was the only miner. However, in March 2010, the first Bitcoin exchange, BitcoinMarket.com, was established, resulting in increased interest in the digital currency. By the spring of 2011, Bitcoin’s value had passed $1.

Bitcoin halving is a critical event that occurs every four years on the Bitcoin network. The next one is expected to take place in 2024, and it’s important to understand what it is, how it works, and its effects on Bitcoin’s price.

Bitcoin halving is a process where the reward for mining Bitcoin transactions is halved. The reward is the amount of Bitcoin that miners receive for solving complex mathematical problems and adding transactions to the blockchain. Bitcoin was designed to have a limited supply, with only 21 million bitcoins to be mined. As of April 2023, over 18.7 million bitcoins have been mined, and the remaining number of Bitcoins decreases with each halving.

The first halving of Bitcoin occurred on November 28, 2012, and the reward for mining was cut from 50 BTC per block to 25 BTC per block. The second halving occurred on July 9, 2016, reducing the mining reward to 12.5 BTC per block. The third halving occurred on May 11, 2020, when the reward per block was reduced to 6.25 BTC.

Halving is an essential part of Bitcoin’s design as it helps control inflation and ensure the longevity of the Bitcoin network. Reducing mining rewards slows the rate at which new bitcoins enter circulation, making them more scarce and valuable. As the mining reward decreases, the cost of mining Bitcoin increases, making it more challenging to earn bitcoins.

Historically, Bitcoin halvings have significantly affected the price of Bitcoin.

The first halving in 2012 saw the price of Bitcoin rise from around $11 to over $1,000 in a year. The second halving in 2016 also had a similar effect, with Bitcoin’s price increasing from around $650 to nearly $20,000 in less than two years.

The third halving in May 2020 boosted the price of Bitcoin from around $8,500 to over $60,000 in less than a year.

The next Bitcoin halving is expected to happen in 2024, where the mining reward will be reduced to 3,125 Bitcoins per block. The halving event is expected to reduce the supply of newly mined Bitcoins, increasing Bitcoin’s price.

As of 20:56 on April 29, 2023, there are around 364 days left until the next Bitcoin halving.

However, as with previous halving events, the exact impact on the price of Bitcoin is uncertain and may be influenced by various factors.

Below we look at some of these factors:

• The market sentimentt: Market sentiment is one of the most important factors influencing the impact of Bitcoin halving. If investors believe that the halving will increase demand for Bitcoin due to reduced supply, the price will likely rise. On the other hand, if investors are bearish on Bitcoin, they may sell their holdings, causing the price to fall.

• Miners: Miners play a crucial role in the Bitcoin network. They verify transactions and create new blocks by solving complex mathematical problems. After each halving event, mining rewards are reduced, meaning that some miners may find it less profitable to continue mining. This can lead to a decrease in the network’s overall hash rate, which in turn can lower transaction processing time and lead to a decrease in the price of Bitcoin.

• Competition: Bitcoin is not the only cryptocurrency on the market. If investors believe that other cryptocurrencies are better investments than Bitcoin, the impact of the halving on the Bitcoin price may be minimal.

• Adoption: The use of Bitcoin has grown steadily over the years. However, adoption rates can vary significantly depending on factors such as government regulations, media coverage and public perception. If there is an increase in adoption after the halving, it could increase the demand for Bitcoin, which could drive up the price.

• Economic and political events: Bitcoin is often considered a hedge against economic and political instability. If major economic or political events occur around the halving time, it may affect the price of Bitcoin. For example, during the COVID-19 pandemic, Bitcoin’s price initially fell, but later rebounded as investors turned to alternative investments.