The BTC halving will occur when the number of blocks reaches 840,000 in April 2024. Then the reward per block will decrease from 6.25 to 3.125 BTC. Typically, Bitcoin price increases for about six months before the halving and remains fairly stable during the event. Primary growth occurs in the year after the halving. If Bitcoin reflects its performance from the previous two periods, its price could reach $220,000 in 2025.
KUALA LUMPUR, MALAYSIA – Media OutReach Newswire – January 31, 2024 – The Bitcoin (BTC) halving will occur in April 2024, resulting in a 50% reduction in Bitcoin mining speed. Historically, this event catalyzes appreciation and therefore attracts investor attention. To determine whether the Bitcoin halving will propel BTC to new heights, let's explore and analyze the dynamics together.
Bitcoin, mining, halving – what you need to know
Bitcoin is a digital currency that operates on a decentralized computer network. Bitcoin was created in 2009 by an unknown group of people or, according to some sources, a person named Satoshi Nakamoto. The distinctive feature of Bitcoin lies in its limited supply of 21 million coins, which are acquired through the mining process. Mining uses computer power to solve complex mathematical puzzles and verify transactions on the Bitcoin network. Newly mined Bitcoins are given to miners as a reward for their work. However, the number of Bitcoins miners receive for each block (transaction set) varies. Every 210,000 blocks, or roughly every four years, miners' rewards are halved. This phenomenon is called “BTC halving” or “halving.”
The purpose of Bitcoin halving is to maintain the scarcity and value of the currency while controlling the inflation rate. It is assumed that as the number of newly issued Bitcoins decreases, demand increases and prices rise accordingly. The basis for this is the economic concept of supply and demand. However, a halving event doubles the cost and complexity of mining, reducing miners' profitability. This could cause some miners to exit the market, reducing the hash rate – the network's overall computing power – and potentially compromising its security.
The next Bitcoin halving will occur when the number of blocks reaches 840,000 in April 2024. The reward per block will decrease from 6.25 to 3.125 BTC at this point. This will be the fourth halving of the leading cryptocurrency in history. The previous three halvings took place in 2012, 2016 and 2020.
Is it possible to make money from BTC halving?
Assuming constant demand, halving supply is expected to double the value of the asset. Historical data suggests that investing in Bitcoin before a halving event was a profitable strategy.
“Typically, Bitcoin starts rising around six months before the halving, and not much changes during the halving period,” said Octa financial markets analyst Kar Yong Ang. “On average, the upper peak of the exchange rate has historically been observed more than a year after the halving,” he added.
Examining price dynamics in the year before and after the halving events over the past three cycles shows significant growth for Bitcoin. During these two years, Bitcoin recorded remarkable gains: about 30,000% in 2012, 786% in 2016, and 712% in 2020. If Bitcoin continues to show the same performance this time, its price could reach $220,000 in 2025. reach dollars.
It is important for traders to focus on a shorter time frame. Notably, the price of BTC increased by 928% 150 days after the first halving, followed by a 16.6% increase after the second halving and a subsequent 25.8% increase after the third halving.
However, as factors such as significant hacks or bankruptcies of crypto companies, exchange conditions, whale manipulation, or regulatory changes reduce coin issuance, future halving events could be less impactful.
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