The fourth bitcoin halving occurred on Friday at a little after 8:09 p.m. Eastern, dropping the issuance rate of new bitcoin to 3.125 roughly every ten minutes.
Despite the notable event, it's unclear whether it will lead to a sharp bitcoin price rise as it has in the past.
The bitcoin halving may best be viewed as a symbolic event more than anything else, as it illustrates bitcoin's value proposition on the backdrop of relatively high inflation rates.
It's likely that miners may be affected more than anyone else due to the loss of revenue, though some miners are exploring other avenues to make up for that shortfall.
The highly-anticipated fourth iteration of the bitcoin halving occurred a little after 8:09 p.m. Eastern on Friday. Bitcoin traded flat in the immediate aftermath of the halving, holding steady around $63,000.
After the halving, the rate of issuance of new bitcoin as well as the rewards for successful bitcoin miners are cut in half. There can only be 21 million bitcoin, and fewer new tokens entering circulation could impact bitcoin prices. That's why, the halving is watched closely by miners and investors alike.
After today's halving, the rate of new bitcoin created roughly every 10 minutes is 3.125. These halving events take place after every 210,000 blocks are validated or roughly every four years and were baked into the network's design when it was originally launched in January 2009.
After the halving, the block reward or subsidy associated with validating each new block of transactions on the Bitcoin network is cut in half. The block subsidy is the newly-created bitcoin that is included in the block as a reward to the associated miner. So in effect, the block subsidy for successful miners is now 3.125 bitcoin.
In addition to the subsidy, miners also collect any fees associated with the transactions in the block.
The halving block was mined by ViaBTC, and it was the 840,000th block mined on the Bitcoin network. However, it is interesting to note that the successful miner took home a little over 40 bitcoin or equivalent of more than $2.6 million in block subsidy and fees as their reward, according to data from mempool.space.
This fees is much higher than the a little over 7 bitcoin, worth a little more than $450,000 were earned in total fees for successful validation of the blocks that immediately came before the halving block. The reason for this spike is unclear, but perhaps it was people willing to pay higher fees to get their transactions among the 3,050 included in the halving block.
In the past, halvings have led to new all-time highs for the bitcoin price in the months following the events. However, this time has been different, as the bitcoin price has already reached a new all-time in the months prior to the halving.
Much of the recent rally was driven by the spot bitcoin exchange-traded funds (ETF), perhaps an indication the demand created by that market may have a greater impact on bitcoin prices than halving events.
According to Kraken Head of Strategy Thomas Perfumo, there is a degree of additional symbolism associated with this halving in terms of the illustration of bitcoin's apolitical, unwavering monetary policy at a time when many people around the world are having questions about their own currencies.
"At a time when you have people who are looking at their conventional currencies—inflation, interest rates, and the economic environment they live in—they see this alternative form of currency, bitcoin," Perfumo told Bloomberg.
However, analysts at JPMorgan and Deutsche Bank said that the impact this of halving was mostly baked into the current bitcoin prices and there isn't likely to be a large upward movement in the price in its aftermath.
According to these reports, the near-term effects of the halving may be limited to the bitcoin mining sector, where consolidation could occur as overall hashrate declines due to decreased profitability.
That said, there are also indications that miners could have avenues for increased revenue even if the halving does not lead to a price boom. This increased revenue would come via increased aggregate fees from transactions spearheaded by recent developments such as Ordinals and layer-two networks.
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After the halving, the rate of issuance of new bitcoin as well as the rewards for successful bitcoin miners
bitcoin miners
Bitcoin mining is a network-wide competition to generate a cryptographic solution that matches specific criteria. When a correct solution is reached, a reward in the form of bitcoin and fees for the work done is given to the miner(s) who reached the solution first.
are cut in half. There can only be 21 million bitcoin, and fewer new tokens entering circulation could impact bitcoin prices. That's why the halving is watched closely by miners and investors alike.
For instance, after the first halving, the reward for bitcoin mining dropped to 25 BTC per block. The last halving should occur in 2140. At that point, there will be 21 million BTC in circulation and no more coins will be created. From there, miners will just be paid with transaction fees.
The much-anticipated bitcoin halving event has come and gone, quietly marking a historic moment in the world of digital assets. On April 19, 2024, the block reward for bitcoin miners was reduced by half, from 6.25 BTC per mined block to 3.125 BTC per mined block. However, you wouldn't know it from the lack of fanfare.
Altcoins (alternative coins), essentially any cryptocurrency other than Bitcoin, are set to receive a knock-on effect from the halving. The interconnectedness of Bitcoin and altcoins goes well beyond price correlation.
Bitcoin halving means miners receive 50% fewer bitcoins per completed block, making Bitcoin mining less lucrative. But halvenings historically lead to Bitcoin price increases, incentivising miners to keep mining despite the lower reward.
“It's pretty much Economics 101” that bitcoin prices go up after halving, according to Sevens Report analyst Tom Essaye, who explained that so long as demand doesn't decrease and new supply goes down, the “only thing left to move is price.”
Because Bitcoin is so powerful and has so much potential, Bitcoin's projected value and estimated growth could be astronomical. Speculation from crypto analysts and industry experts suggests that Bitcoin's long term value could reach over $100,000 to as much as one million dollars per BTC in the future.
The most recent halving event took place on April 19, 2024. The event cut the reward from 6.25 BTC per block to 3.125 BTC per block. Bitcoin halving helps manage the cryptocurrency's supply and maintain its scarcity. Historically, bitcoin halving has led to an increase in its value.
Nansen research analyst Aurélie Barthere agreed that bitcoin's post-halving price returns were generally superior — five to six times greater in the 250 days following halvings compared to other years.
A recent report predicts that Bitcoin will reach a new all-time high in 2024. Bitcoin (BTC) is expected to reach a new record of $88,000 (€82,000) throughout the year, before it settles around $77,000 at the end of 2024, according to a new report. The cryptocurrency's current price sits at around $43,000.
Bitcoin (BTC) price again reached an all-time high in 2024, as values exceeded over 73,000 USD in March 2024. That particular price hike was connected to the approval of Bitcoin ETFs in the United States, whilst previous hikes in 2021 were due to events involving Tesla and Coinbase, respectively.
Thielen also cautioned investors about the upcoming halving on April 20th, which many assume will be a wildly bullish event for bitcoin. This expectation stems from the token's previous post-halving cycles which typically saw bitcoin race to new all-time highs.
Thomas Perfumo, head of strategy at Kraken, said Bitcoin prices historically peak 12 months to 18 months after a halving event but noted that the cryptocurrency already hit an all-time high less than two months ago, “which is earlier than in prior market cycles.”
"While many participants are focused on the historical impact that halvings have had on the BTC price, few are talking about how long this typically takes to come to fruition. Each halving has resulted in peak prices (prior to a big correction) between 10 and 16 months from the actual event.
Since halving reduces their rewards, there may be some operations that become unprofitable. So miners are looking to shore up their balance sheets. “Currently, miner balances are near an all-time low.
Unlike stocks and bonds, cryptocurrency doesn't derive its value from an underlying asset. Although the halving creates more scarcity, bitcoin doesn't exactly follow the typical rules of supply in demand. “You'd think having a restricted supply should always mean the price goes up, but that's not true,” Boneparth says.
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