A big thing has just happened to Bitcoin. It's called the halving (2024)

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A big thing has just happened to Bitcoin. It's called the halving? ›

Bitcoin has just experienced the halving 2024 — and some experts believe it will turbocharge a rally in the digital currency. The halving takes place roughly every four years, and it previously has been a pretty obscure event. In broad terms, the halving effectively reduces the supply of new bitcoins.

Typically, when the halving cuts supply, it's led to huge rallies for bitcoin. In fact, the previous (and only) three halvings in the chain's history have come before every bull run, in which the coin has touched new all-time highs and a surge of investors have entered the market for the first time.

As each halving event reduces the block reward by half, the supply of new bitcoins entering circulation will continue to decrease over time. This built-in scarcity mechanism is designed to make Bitcoin increasingly scarce, which, in theory, should lead to higher prices as demand grows while supply diminishes.

While the immediate impact on Bitcoin's price may not be significant, the halving is expected to have long-term effects on the supply and demand dynamics of the cryptocurrency. As the supply of new coins decreases, Bitcoin's scarcity increases, which could potentially lead to price appreciation over time.

Bitcoin Halving Is Not Bullish

The most recent halving in May 2020, for example, came alongside massive monetary and fiscal stimuli surrounding the Covid shutdowns. “I wouldn't give almost any credit to the halving because I don't think the halving is the big driver,” he said. “It's really the big macro factors.”

Only 21 million bitcoins will ever exist, and more than 19.5 million of them have already been mined, leaving fewer than 1.5 million left to pull from. So long as demand remains the same or climbs faster than supply, bitcoin prices should rise as halving limits output.

Historically, the halving has driven a significant price increase, but this time around, Bitcoin is already not far from record levels. "It's difficult to say whether this could limit how high the price could rise, but we could well be in store for some price volatility.

Thomas Perfumo, head of strategy at Kraken, said Bitcoin prices historically peak 12 months to 18 months after a halving event but noted that the cryptocurrency already hit an all-time high less than two months ago, “which is earlier than in prior market cycles.”

There will be more halvings in the future. Expect to be reading about this event again in early 2028. At that point, the reward will halve again to 1.5625 BTC per block. This will keep going on until around the year 2140 when mathematicians predict the last Bitcoin will be mined.

Will Bitcoin skyrocket in 2024? ›

What could give Bitcoin a boost in 2024? More than half of the experts Finder surveyed expected the price to increase after a so-called "BTC halving event" in April 2024. A halving event refers to a period every few years when the reward for mining Bitcoin transactions is cut in half.

Bitcoin BTC/USD price history up until Apr 22, 2024

Bitcoin (BTC) price again reached an all-time high in 2024, as values exceeded over 73,000 USD in March 2024.

Fidelity Predicts: $1B per 1 BTC by 2038 — 2040

Jurrien Timmer, the Director of Global Macro at Fidelity Investments, thinks the value of a single Bitcoin could reach $1 billion by the year 2038 — very close to our Bitcoin price prediction 2040 target date. Timmer's demand model is rooted in Metcalfe's Law.

Limited supply is one of bitcoin's key features. Only 21 million bitcoins will ever exist, and more than 19.5 million of them have already been mined, leaving fewer than 1.5 million left to pull from. So long as demand remains the same or climbs faster than supply, bitcoin prices should rise as halving limits output.

This provision states that the Bitcoin block reward should be permanently cut in half roughly every 210,000 blocks, or approximately every 4 years. The purpose of Bitcoin halving, along with the fixed total supply, is to decrease the number of new coins entering the Bitcoin network.

Amina analysts said miners are selling their bitcoin ahead of the halving. Since halving reduces their rewards, there may be some operations that become unprofitable. So miners are looking to shore up their balance sheets. “Currently, miner balances are near an all-time low.

These peaks are often reached within a year after a halving, riding the wave of reduced supply and heightened demand, before the natural market correction takes hold due to profit-taking and the cyclical nature of investor sentiment.

Altcoins (alternative coins), essentially any cryptocurrency other than Bitcoin, are set to receive a knock-on effect from the halving. The interconnectedness of Bitcoin and altcoins goes well beyond price correlation.

When Is the Next Bitcoin Halving? The fourth Bitcoin halving was completed on April 2024. It is difficult to predict the exact date of the next halving as it depends on the block height. Since halving happens every 210,000 blocks, the next Bitcoin halving is expected to occur in 2028.