3/14/2024

Bitcoin Halving: What does it mean?

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ХОЧЕШЬ УЗНАТЬ КАК ЗАРАБАТЫВАТЬ НА НОВОСТЯХ?

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Key points:

  • Halving is expected at the end of April – Bitcoin will be halved.
  • Limited supply may cause prices to rise.
  • Since the last halving in 2020, the value of Bitcoin has increased by 12%.

Against the backdrop of the rapid growth of the Bitcoin rate, more and more attention is being paid to the upcoming halving – an event that can influence the further dynamics of the cryptocurrency.

Halving, or halving, is a key event for Bitcoin that directly affects its supply. A decrease in the rate of issuance of new coins causes the asset to become scarce, which, in turn, can lead to an increase in its value.

Thus, halving acts as a factor contributing to strengthening the position of Bitcoin as a scarce commodity.

What is halving?

Halving is a change to the underlying Bitcoin blockchain protocol aimed at regulating the rate at which new coins are generated. Since the creation of Bitcoin, its developer, Satoshi Nakamoto, has limited the total supply of tokens to 21 million. To implement this idea, a halving mechanism was integrated into the Bitcoin code, which operates by gradually reducing the rate at which new coins are issued.

Today there are approximately 19 million tokens in circulation. Halving, making mining less profitable, slows down the production of new bitcoins, thereby causing their scarcity.

The next halving is expected to occur at the end of April this year. The exact date has not been determined, since the halving is tied to reaching a certain number of blocks in the blockchain – 210,000. This event usually occurs approximately every four years.

How does halving affect the Bitcoin price?

Proponents of the scarcity of Bitcoin as a factor in its value argue that the limited supply of coins (21 million) determines their long-term growth. According to their logic, the lower the supply of a product, the higher its potential price with stable demand.

However, this point of view is not without criticism. Opponents point out that the impact of scarcity is already factored into the current price of Bitcoin. The opaque nature of crypto mining, as well as the limited availability of coin inventory and supply data, makes it difficult to accurately assess this factor.

Analysis of past halvings does not allow us to unequivocally state their impact on the growth of Bitcoin prices. Thus, after the halving on May 11, 2020, the rate increased by 12% in a short period, but the further sharp jump had complex reasons, not limited solely to scarcity.

However, the halving remains an important event for traders and miners who study past events to predict future trends and gain a competitive advantage.

ХОЧЕШЬ УЗНАТЬ КАК ЗАРАБАТЫВАТЬ НА НОВОСТЯХ?

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