Bitcoin halvings are significant events in the world of cryptocurrencies, occurring approximately every four years and directly impacting the issuance rate of new Bitcoins. The halving mechanism involves the block reward halving every 210,000 blocks, reducing the reward from 50 Bitcoins initially to 6.25 Bitcoins per block after the most recent halving in April 2024. The total supply of Bitcoins is capped at 21 million coins. Halvings are essential because they contribute to Bitcoin’s scarcity and deflationary nature, factors that influence its value in the market.
Historically, Bitcoin has experienced price declines leading up to halving events, followed by post-halving price rallies. In the night between April 19 and April 20, 2024, the fourth Bitcoin halving occurred, resulting in a small price drop to $63,564 before recovering to $66,301. Prior to the 2024 halving, Bitcoin had experienced a rally, reaching a peak of $73,605. However, geopolitical tensions caused a sharp decline in the price to below $62,000, highlighting Bitcoin’s volatile nature in response to external events.
Bitcoin’s rise in adoption and recognition in 2024 has been fueled by developments such as the US Securities and Exchange Commission approving Bitcoin spot ETFs, making it easier for traders to invest in the cryptocurrency. Spot Bitcoin ETFs experienced a surge in trading volume, reaching $111 billion in March, nearly triple the volume reported in February. The positive market performance of Bitcoin before the halving was partly attributed to these developments.
The impact of the 2024 halving on the Bitcoin price is expected to be positive in the long term, following the historical trend of price increases post-halving events. Miners’ revenue from Bitcoin mining exceeded $100 million on the halving day, reaching an all-time high. Miners will need to adjust to the reduced rewards per block, with power costs being a significant expense for mining operations. The halving is anticipated to lead to industry consolidation, with larger miners potentially increasing their market share.
The next Bitcoin halving is projected to occur in 2028, further reducing the block reward from 3.125 to 1.5625 BTC. This reduction aims to maintain the scarcity of Bitcoin and prevent price inflation, ensuring that the maximum supply of 21 million coins is not reached too quickly. Various price predictions for Bitcoin post-halving range from $75,000 to as high as $500,000 or even $1 million. With experts and analysts anticipating continued price growth and potential new all-time highs, the broader context of adoption, regulation, macroeconomic conditions, and technological advancements should also be considered in predicting Bitcoin’s future price movements.
