What You Should Know About Bitcoin Halving 2024
According to a top expert, the effect of the Bitcoin halving on cryptocurrency values is frequently overstated, and the next halving, scheduled for April 2024, may take a different course than prior ones. The halving event, which occurs every four years and reduces the pace of new Bitcoin creation in half, is usually regarded as one of the key factors behind Bitcoin’s strongest upward movements. Despite the positive narrative around the halving, the occasion by itself does not ensure that Bitcoin will increase in value. Prices are unlikely to increase if there is not a large increase in demand to offset the decreased supply of new Bitcoin. The halving is also a completely predictable occurrence, which means that all market players know exactly when it will happen. As a result, the present price of the security may already be reflecting the halving’s effects before they actually take place. When asked about the highly anticipated event, Bloomberg analyst Mike McGlone commented, “Things that we most anticipate generally don’t happen.” And it’s the thing that worries me. There is unanimous agreement,” he continued. Additionally, the effect of the halving on the new Bitcoin supply is decreasing with each occurrence; eventually, its effect will be irrelevant. As a result, changes in demand are increasingly outweighing changes in supply in determining the price of bitcoin.
Since 2009, the quantity of new Bitcoins distributed as a reward to miners that add a fresh block of verified transactions to the blockchain has decreased by half every four years. The first prize was 50 Bitcoin, which is now worth more than £1,000,000. Currently, the reward is 6.25BTC, or around £136,000, available.
According to the Bitcoin algorithm, halving must occur once a specific number of blocks are generated. Although no one is certain, analysts predict that the second halving will take place in April or May 2024. The interval since the previous one would be almost precisely four years. According to experts, the fairly predictable structure of Bitcoin halvings was intended to prevent a significant shock to the network. However, it doesn’t follow that there won’t be a trading frenzy surrounding the subsequent halves of Bitcoin. According to Rob Chang, CEO of privately held Bitcoin miner Gryphon Digital Mining, “Historically, there is a lot of volatility in the price of Bitcoin leading up to and after a halving event.” “However, a few months later, the price of Bitcoin usually ends up being substantially higher. Even if there are a lot of other factors that affect the price of Bitcoin, it seems that halving occurrences are often bullish for the cryptocurrency once the first volatility subsides. Baker advises investors to exercise caution in light of the upcoming Bitcoin halving. Reduced mining activity may result in a price plateau even if scarcity might raise prices. However, Weisberger advises investors to concentrate on the network’s overall development rather than the precise dates of the halves occurrences. The possibility of Bitcoin realizing its promise as a universal store of wealth rises as long as the network keeps expanding.
When Bitcoin experiences a halving, the pace of supply also effectively decreases by half. An asset tends to increase in value when demand levels are stable but supply is constrained. Before the projected halving in April of next year, traders may try to take advantage of this dynamic by purchasing Bitcoin in the hopes that it would boost the value of their holdings.
