What This Means For Bitcoin

Bitcoin halvings are significant events that have occurred since the digital asset was first launched in 2009. Since then, there have been a total of three halvings that have seen the block reward halve each time. The next Bitcoin halving will happen in 2024 which means the market is halfway there. As this fourth halving approaches, we take a look at how this affects the supply of BTC and thus the value of the cryptocurrency.

Next fourth half

Bitcoin half It is scheduled to occur every 210,000 blocks and the next halving estimate is placed on May 4, 2024, based on the current rate at which Bitcoin is mined. Currently, just over 19 million BTC has been mined, leaving only an additional 2 million BTC left to be mined. With the block reward halving, which currently sits at 6.25 BTC per block, it helps predict the supply mechanics of the digital asset.

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With each half, the issue and daily supply decrease. It is expected to decrease even less with the next halving, as the reward for each block will be only 3.125 BTC, and with an average of 144 blocks mined per day, the daily BTC given to miners on a daily basis will decrease from 900 to 450. This helps to ensure a diminishing supply of Bitcoin Over time, making it one of the essential features of the network’s monetary policy.

How does it affect bitcoin?

Bitcoin halving has different effects on cryptocurrency. One of the ways in which these effects are more pronounced is the difficulty of mining. As the value of Bitcoin rewarded to miners per block decreases, this leads to stiffer competition, causing mining difficulty to increase. This is evident in the trend following the last bitcoin halving that occurred in 2020. Likewise, the bitcoin hash rate is also increasing because miners need more computing power to be able to mine blocks.

Bitcoin price chart from TradingView.com

BTC recovers above $41,000 | Source: BTCUSD on TradingView.com

One of the highlights of the current state of the network is the low fees. Although Bitcoin is halfway towards the other halving, transaction fees remain near all-time lows. This is She said To be the result of more efficient use of block space as there is no evidence of a decrease in the economical use of the network.

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However, one thing that has always remained constant in all Bitcoin Halves is its effect on price. Now, halfway to the next halving was when the digital asset hit some of its lowest prices. So there are expectations that the price will deteriorate at this point. However, the halving that reduces the supply of BTC in circulation has always been the catalyst for the next bullish rally and 2024 is expected to be no different.

Featured image from 99Bitcoins, chart from TradingView.com

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