Last updated on December 9th, 2024 at 10:27 am
The question on the lips of every crypto trader or investor is “what becomes of the price of BTC if this Bitcoin halving 2024 kicks off?”
If this is your concern…You’re in the right place!
Because today, I’m going to explain in simple terms what bitcoin halving is, how it will influence the price of Bitcoin and how many Bitcoin halves are are left even if you’re a complete beginner in cryptocurrency investments and trading.
Moreso;
This could be an opportunity to make massive profit after reading this article.
Let’s dive in…..
What is Bitcoin halving?
Bitcoin Halving is an event that occurs roughly every four years in the Bitcoin network. It is a mechanism built into the Bitcoin protocol to control the supply of new bitcoins being created and introduced into circulation.
Bitcoin has a limited supply of 21 million coins that can ever be created. New bitcoins are created through a process called mining, where miners use their computing power to validate transactions and add new blocks to the blockchain.
As a reward for their work, miners receive a certain number of newly created bitcoins with each block they successfully mine.
Initially, the reward for mining a new block was set at 50 bitcoins. However, the Bitcoin protocol has a built-in mechanism called “halving” that cuts this reward in half every 210,000 blocks (approximately every four years).
The purpose of halving is to gradually decrease the rate at which new bitcoins are created and introduced into circulation. This is done to control the supply of bitcoins and maintain its scarcity, which is one of the key factors that give Bitcoin its value.
After the first halving in 2012, the block reward was reduced from 50 bitcoins to 25 bitcoins.
The second halving in 2016 reduced BTC further to 12.5 bitcoins, and the 3rd halving which occurred in 2020 took it down to 6.25 bitcoins.
So, this coming Bitcoin Halving is expected to occur in 2024, when the block reward will be reduced to 3.125 bitcoins.
This halving process will continue approximately every four years until the last bitcoin is mined, which is expected to happen around the year 2140.
When is The Exact Date For The Next Bitcoin Halving 2024?
The exact date for the next Bitcoin halving in 2024 is not known with 100% certainty, as it depends on the rate at which new blocks are mined, which can vary slightly. However, based on the current estimates and calculations, the next Bitcoin halving is expected to occur around:
May 2024
More specifically, various estimates suggest that the next Bitcoin halving will take place between mid-May and late May 2024.
Some projections for the approximate date of the next halving include:
- May 14, 2024 (per BTC.com)
- May 19, 2024 (per Bitcoinblockhalf.com)
- May 24, 2024 (per CryptoGround.com)
The reason for the slight variations in the projected dates is that the halving is triggered once 210,000 blocks have been mined after the previous halving event, which occurred on May 11, 2020. The rate of new block creation can fluctuate based on the total computing power (hash rate) dedicated to mining on the Bitcoin network.
However, most estimates converge around the mid-to-late May 2024 timeframe for the next Bitcoin halving to occur. Monitoring the rate of new block creation and the overall network hashrate will help refine these estimates as the event draws closer.
How Many Bitcoin Halving Events Have Occurred?
Basically 3 Bitcoin halving events have occurred so far. Here are the details of the previous Bitcoin halvings that have occurred, including the exact dates and the reduction in the block reward:
- First Bitcoin Halving:
Date: November 28, 2012
Block Reward Reduction: From 50 BTC to 25 BTC
- Second Bitcoin Halving:
Date: July 9, 2016
Block Reward Reduction: From 25 BTC to 12.5 BTC
- Third Bitcoin Halving:
Date: May 11, 2020
Block Reward Reduction: From 12.5 BTC to 6.25 BTC
As you can see in each of these events, the block reward for Bitcoin miners was reduced by half as per the built-in halving mechanism in the Bitcoin protocol. This coming halving in 2024 will further reduce the block reward from 6.25 BTC to 3.125 BTC.
How Does Bitcoin Halving Affect The Price Of Bitcoin?
Many are already asking if this bitcoin halving will increase the price of bitcoin. While there is no guarantee that it will increase the price of BTC, Bitcoin halving has a significant effect on the price of Bitcoin, and historically, it has been followed by a rise in the price. Here’s how Bitcoin halving can affect the price:
1. Supply and Demand:
Bitcoin has a limited supply, and the halving reduces the rate at which new Bitcoins are introduced into circulation. With a decreasing supply and constant or increasing demand, the basic economic principle of supply and demand suggests that the price of Bitcoin should rise over time.
Check out 22 Coins To Buy Now Before The Next Crypto Bull Run In 2024
2. Increased Scarcity:
After each halving event, Bitcoin becomes scarcer as the rate of new supply is cut in half. This increased scarcity can drive up the price as Bitcoin becomes rarer and potentially more valuable.
3. Investor Speculation:
The halving events are highly anticipated in the cryptocurrency community, and investors often speculate on the potential price increase. This speculation can lead to increased buying activity, driving up the demand and, consequently, the price. you can always monitor price movements with CoinMarketCap
4. Miner Selling Pressure:
After a halving event, miners receive fewer Bitcoin rewards for their efforts. To maintain profitability, some miners may sell a larger portion of their rewards, potentially increasing selling pressure in the short term. However, in the long run, the reduced supply often outweighs this selling pressure.
5. Media Attention:
Bitcoin halvings generate significant media attention, which can attract new investors and increase awareness of Bitcoin. This increased attention can drive up demand and, consequently, the price.
It’s important to note that while Bitcoin halving has historically been followed by a price increase, there are no guarantees. The price of Bitcoin is influenced by various factors, including market sentiment, adoption rates, regulatory developments, and overall economic conditions.
However, the reduced supply and increased scarcity resulting from Bitcoin halving events have generally been seen as positive factors for the long-term price appreciation of Bitcoin, as they align with the fundamental principles of supply and demand.
What Are The Potential Risks of Bitcoin Halving?
While Bitcoin halving is generally seen as a positive event that can drive up the price due to reduced supply, there are potential risks associated with it:
1. Miner Capitulation:
One of the primary risks of Bitcoin halving is miner capitulation. When the block reward is reduced by half, miners receive fewer Bitcoin rewards for their efforts. This could lead to some miners, especially those with older and less efficient mining rigs, becoming unprofitable and being forced to shut down their operations. If a significant number of miners capitulate, it could lead to a temporary decrease in the network’s hash rate, which could make the network less secure and potentially lead to delays in transaction processing.
2. Increased Volatility:
Bitcoin halving events tend to attract a lot of attention and speculation from investors and traders. This increased speculation can lead to heightened price volatility, as the market tries to find a new equilibrium between supply and demand. Significant price swings in either direction are possible, which can be risky for traders and investors.
3. Selling Pressure:
While the long-term effect of halving is expected to be a price increase due to reduced supply, in the short term, there could be selling pressure from miners who need to liquidate their Bitcoin holdings to cover operational costs. This selling pressure could potentially lead to a temporary price decline after the halving event.
4. Regulatory Concerns:
Bitcoin halving events often renew regulatory scrutiny and discussions around the potential risks and benefits of cryptocurrencies. Any adverse regulatory developments or increased regulatory pressure could negatively impact the price of Bitcoin and the broader cryptocurrency market.
5. Investor Expectations:
There is always the risk that the halving event may not live up to investor expectations, especially if the market has already priced in the anticipated price increase. If the price fails to rise as expected, it could lead to disappointment and a potential sell-off.
6. Technical Issues:
While unlikely, there is a small risk of technical issues or bugs arising from the halving process itself, which could potentially disrupt the Bitcoin network or lead to unintended consequences.
It’s important to note that while these risks exist, Bitcoin halving events have historically been followed by significant price appreciation in the long run. However, investors and traders should always exercise caution and manage their risk appropriately when dealing with the volatile cryptocurrency market.
How many Bitcoin halvings are left?
There are an estimated 64 Bitcoin halvings left before all 21 million Bitcoins are mined and no new coins can be created.
Here’s a breakdown:
- The current block reward is 6.25 BTC per block mined
- The next halving in 2024 will reduce it to 3.125 BTC per block
- After that, there will be halvings approximately every 4 years until the block reward becomes so small that it cannot be halved anymore.
- Three halvings have already taken place:
- 2012: Block rewards reduced from 50 BTC to 25 BTC.
- 2016: Block rewards reduced from 25 BTC to 12.5 BTC.
- 2020: Block rewards reduced from 12.5 BTC to 6.25 BTC.
Specifically:
After Bitcoin halving 2024, there will be 32 more halvings until the reward reaches 1 Satoshi (0.00000001 BTC).
- Halvings will continue until Bitcoin reaches its maximum supply of 21 million coins.
- Each halving reduces the block reward, effectively making it nearly negligible by the final halving event.
- It is estimated that there are 32 halvings in total programmed into Bitcoin’s protocol. Since three have already occurred, 29 halvings remain.
- When the last Bitcoin is mined (around 2140), miners will no longer receive block rewards in Bitcoin.
- Instead, they will earn transaction fees as compensation for maintaining the network and validating transactions.
The halvings will continue to occur at the following approximate intervals:
- Every 4 years currently
- Then every 2 years once the reward is very small
Conclusion
While over 90% of the 21 million Bitcoin supply has already been mined, the issuance rate will keep getting cut in half every 4 years (then 2 years) for about the next 120 years until the final Bitcoin has been mined.
Also read Protect Your Crypto Assets: How to Securely Store Cryptocurrency on a USB Drive
FAQs
What is the Bitcoin halving, and why does it impact Bitcoin’s price?
Bitcoin halving is a pre-programmed event that occurs approximately every four years, reducing the mining reward by 50%. In 2024, the reward will drop from 6.25 BTC to 3.125 BTC. This reduction decreases the supply of new Bitcoin entering circulation, which, combined with steady or increasing demand, often drives the price upward. Historically, halvings have been followed by significant price increases, as seen after the 2012, 2016, and 2020 events.
Is the Bitcoin halving already priced into the market?
Some analysts argue that the anticipation of the halving may already be factored into Bitcoin’s price due to market speculation. However, the true impact often unfolds post-halving, as the reduced supply meets ongoing or increased demand. This dynamic has historically led to long-term price increases, though short-term volatility is also common
How has the price of Bitcoin reacted to previous halving events?
In past halvings:
- 2012: Bitcoin’s price increased from $12 pre-halving to $1,000 within a year.
- 2016: The price grew from $640 to nearly $20,000 in the following cycle.
- 2020: Bitcoin rose from around $8,600 to an all-time high of $69,000 by late 2021.
While historical trends suggest a bullish impact, market conditions, demand, and macroeconomic factors also play critical roles.
