Bitcoin has long been a leader in the crypto ecosystem as the first and the largest cryptocurrency by market capitalization. Since its inception in 2009, Bitcoin has dominated the space as a digital currency with its novel aspect of a capped and dynamic supply mechanism.
As the beginning of 2024 has given an excellent kickstart to Bitcoin, one of the monumental events is gradually nearing with every passing day- Bitcoin Halving 2024. After the Bitcoin spot ETF approval, this major event can trigger the bull run in the crypto space.
The total supply of Bitcoin is fixed at 21 million, which comes out only via the mining process. There is no other way to add new Bitcoin to the circulating supply. Every miner is incentivized with a ‘Block Reward’ after successfully mining a block and securing the blockchain. This gradual yet continually lowering increase in Bitcoin supply has set an ideal example of a sustained currency ecosystem, which has become possible by its halving functionality.
Let’s elaborate on why Bitcoin halving 2024 is much hyped right now and how big it is as an opportunity for investors.
What is Bitcoin Halving?
Bitcoin Halving is a Crypto event that cuts block mining reward in half, and it occurs after every 210,000 blocks on the Bitcoin network. The usual timeframe for these block processing is four years. Halving is one of the most influential events for Bitcoin, which provides an economic boost to the value of BTC. It can also be described as a technical adjustment for the Bitcoin supply.
The primary purpose of halving is to manage and maintain BTC’s demand and value as a currency (simply, it follows demand and supply phenomena). It solely depends on the assumption that its demand will increase as the issuance of new Bitcoin decreases, which will essentially result in upward price movement. This way, the ecosystem around it can benefit from sustained market motives and control inflation.
Here, note that halving also increases the operating cost for Bitcoin miners as the block reward is cut by 50%, as complexity still remains the same. Now, this question may have arisen in your mind: how will miners be rewarded after all 21 million Bitcoins are mined? Here’s an answer.
Once all 21 million Bitcoins are mined, transaction fees will become the primary incentive for miners. There will be no mining rewards for miners to mine new Bitcoins. Miners will rely on fees paid by users to prioritize and include their transactions in the blockchain.
The next and fourth Bitcoin Halving 2024 will take place in April 2024, which will cut down block rewards to 3.125 BTC from the current 6.25 BTC. Bitcoin has seen three halving events in 2012, 2016, and 2020 since its inception, with the BTC price recording gains of approximately 30,000%, 786%, and 720% consecutively during these years.
Why There’s a Lot of Buzz Around Bitcoin Halving 2024?
Historically, Bitcoin halving has been proven to bring positive outcomes, and it is considered one of the significant narratives for an uptrend in the crypto market cycle. As halving cuts down the increasing supply of BTC, it fuels the market where BTC supply will decrease, and demand will remain the same.
While Bitcoin is going through two major catalysts in the same year – spot ETF approval and Bitcoin halving 2024 – it is expected that the result of these events might lead BTC to another all-time high in upcoming months. The inflow of spot ETFs has not yet reached the expected level, but it is still the initial days of ETF trading so it might improve over the following months.
As the cryptocurrency industry tends to move on price speculations, events like Bitcoin halving present an opportunity for traders, investors, analysts, and the whole crypto community.
Such events allow them to reap profit from the potential uprising in Bitcoin’s price. The upsurge in Bitcoin price is also the most predictable among all other catalysts.
Why Bitcoin Halving 2024 is Unique?
Besides, several other buzzwords are also accompanying the Bitcoin halving in 2024, which may lead to the next cycle of market uptrend.
- Retesting All-time Highs
Bitcoin recorded an all-time high of $69,500 in November 2021; since then, it has not been able to touch nearly $50,000. After this interval, the halving is the only forward-seen move that could lead Bitcoin prices to new highs.
- Spot Bitcoin ETF Effects
The recently approved Bitcoin ETFs have the potential to drive a massive boost in Bitcoin adoption and, eventually, in BTC price. It has exposed Bitcoin to trillions of dollars in the traditional finance industry with the involvement of the world’s largest asset managers, including BlackRock and Fidelity.
- Boost in Adoption
Bitcoin has had remarkable growth and adoption since the last halving. Amid ETF approval, It is currently easily available to many more institutions and countries while having a clear regulatory stance compared to the previous cycle.
Moreover, the emergence of Ordinals and BRC-20 tokens has also unexpectedly increased demand for block space on Bitcoin, providing BTC with additional utility. While this could not be very effective, its demand for BTC as a fee is crucial.
Considering these points, there is no doubt why the upcoming halving is closely watched and exciting. The recently changed supply dynamics, majorly because of the diversity in Bitcoin investment products, may also cause groundbreaking changes to previous records.
BTC Price Prediction After Bitcoin Halving 2024
A number of analysts from the cryptocurrency industry believe that halving will drive the most unexpected highs in Bitcoin’s price. The most common Bitcoin price predictions are forecasted for the rational mark of $100,000, which is more than double the current price of Bitcoin.
The historical data proves that the halving results are seen months after it’s happening, and it causes Bitcoin prices to break out in gradual periods. Crypto trader and analyst Rekt Capital very well explains the correction of inflows and outflows in the halving phase in this tweet.
According to the tweet, the market is currently in the pre-halving phase, where Bitcoin trades in the range of $40,000 to $43,000. If Bitcoin is to break $100,000 in the coming months, it will be a pump of over 150% throughout the period. Although $100,000 is not a cap-to-price pump, it could even extend beyond as a popular crypto investor and analyst, The Wolf of All Street, has predicted that Bitcoin can go as high as $170,000 after the halving.
Conclusion
While all previous halvings are proven to be highly effective for Bitcoin price, the fourth halving this year is anticipated to outperform all previous records. Different analysts have predicted other highs for Bitcoin, but it is commonly expected to break the current all-time high and set newer records. However, in the fog of excitement, one should never unsee the highly volatile nature of cryptocurrency.
Have a safe sailing of crypto investment!
Have a safe sailing of crypto investment!
FAQs
1. When is the next Bitcoin Halving?
The next Bitcoin halving is expected on 4 April 2024 at the block height of 840,000.
2. When does Bitcoin halving happen?
Bitcoin halving happens at the interval of 210,000 blocks which usually takes 4 years to complete.
3. Why does Bitcoin halving happen?
Bitcoin halving occurs to control the supply of new Bitcoin entering into the market. Halving cuts Bitcoin block reward in half and aims to sustain the ecosystem for the long term.
