What is bitcoin halving and why is it so expected?

What is the halving of Bitcoin? It is a watershed moment for the entire cryptoeconomy. An event in which the reward for mining a bitcoin is halved, making each coin a little rarer and, consequently, a little more valuable. This is not just a mathematical operation, but a built-in mechanism that keeps the cryptocurrency afloat and makes its price rise over the long term.

What is Bitcoin halving? We’ll tell you more about it

Imagine a time when every BTS in the market becomes a little more ‘golden’. This is how bitcoin halving is explained: the reward for mining the currency is halved. This process is programmed into the core and occurs every four years, changing the rules of the game for all market participants. But what does this mean in practice?

It is like a switch that turns on when Bitcoin gains too much weight, at which point it becomes more expensive and even more attractive. For those who follow the market, it’s like the Olympics in the cryptocurrency world: four years waiting for the big moment.

How often does Bitcoin halve in value?

Every four years this crucial event occurs. In the last 15 years, since bitcoin’s launch in 2009, there have been three, and each time they have affected the market and the price of the cryptocurrency. The nearest halving is expected in 2024, and investors are already preparing for a new round of events.

The logic of scarcity and reward

Unlike traditional money, which is printed at will, halving helps bitcoin remain a rare and valuable asset. It is necessary to maintain scarcity in the market, a kind of built-in regulator of the cryptocurrency that controls the pace of its issuance.

Reducing the block reward is key. Previously, miners received 50 bitcoins for each block mined. After the first halving, the reward was reduced to 25, after the second to 12.5, and after the last one, in 2020, to 6.25 bitcoins per block.

Economic importance for the market

By halving the reward, the supply of bitcoins decreases, but the demand remains the same or even increases. This leads to a natural increase in the price of the cryptocurrency. History shows that after each event, the price of bitcoin has skyrocketed. It is important to realise that this scarcity mechanism is built into the architecture of the network and directly affects the value of Bitcoin, turning it into something akin to digital gold.

History of bitcoin halving: from creation to the future

Bitcoin was born in 2009, and has since been halved three times. The first was in 2012. At that time, the reward was reduced from 50 to 25. Prices skyrocketed from $12 to $1200. The second, in 2016, reduced the reward to 12.5, and the price went up again. In 2020, there was a third reduction of the reward to 6.25, and the price of bitcoin also jumped from $8,000 to over $60,000 in one year.

The impact of the halving on the bitcoin exchange rate

The principle is simple: fewer coins minted, more demand. It is like with gold: the less there is, the more valuable it is. After each event, there is a significant increase in the exchange rate. If after the first halving the price rose by 1000%, after the second – by 4000%. Therefore, this is not just a technical process, but a driver of bitcoin price growth.

What will change for miners after the halving? A new game of survival

Mining bitcoins after the halving becomes more difficult. Each time the reward decreases, which makes it harder to recover equipment and electricity. However, despite this, miners continue to mine because the price of bitcoin rises in the long run.

Block reward reduction: what it means for miners

When there is a reduction in the block reward, miners have to double their efforts to get the same results. Whereas a miner used to receive 50 bitcoins per block found, after the halving that figure drops to 25, then to 12.5, and so on. As a result, only those with powerful farms or access to cheap energy resources survive.

Mining after halving: a new playing field

Halving turns mining into a game for the strongest. Only the most efficient remain in the market. Small miners often drop out, while large miners continue to increase their capacity, knowing that their investments will pay off as the bitcoin price rises.

Consequences of the halving: what lies ahead for the cryptocurrency market?

The consequences of the halving are enormous. It is not just an event for miners and crypto-enthusiasts, it is a global change for the entire cryptocurrency market. The impact of the halving on the bitcoin exchange rate is undeniable, and the price increase is just one of the results. Halving leads to increased investor interest, which increases the capitalisation of the entire cryptocurrency market.

Halving and the bitcoin price: a legitimate upswing

Every time there is a halving, the market expects the price to rise. Why? Because bitcoin becomes rarer and demand remains high. If the price rose thousands of percentage points after the first halving, the rise is predictable after subsequent events. Miners get fewer bitcoins, so each coin becomes more valuable. This mechanism prevents inflation from eroding the value of bitcoin.

Conclusion

The halving of bitcoin is a game-changing event. It is not just a technical process, it is an economic revolution that makes bitcoin even more valuable and rare. History shows that each such milestone increases the demand for the cryptocurrency, making it even more attractive to investors.

The next halving, scheduled for 2024, could be a turning point for the entire cryptocurrency market. This event will be eagerly awaited not only by miners, but also by investors around the world.