Key Takeaways
- The fourth bitcoin halving occurred on Friday at a little after 8:09 p.m. Eastern, dropping the issuance rate of new bitcoin to 3.125 roughly every ten minutes.
- Despite the notable event, it's unclear whether it will lead to a sharp bitcoin price rise as it has in the past.
- The bitcoin halving may best be viewed as a symbolic event more than anything else, as it illustrates bitcoin's value proposition on the backdrop of relatively high inflation rates.
- It's likely that miners may be affected more than anyone else due to the loss of revenue, though some miners are exploring other avenues to make up for that shortfall.
The highly-anticipated fourth iteration of the bitcoin halving occurred a little after 8:09 p.m. Eastern on Friday. Bitcoin traded flat in the immediate aftermath of the halving, holding steady around $63,000.
After the halving, the rate of issuance of new bitcoin as well as the rewards for successful bitcoin miners are cut in half. There can only be 21 million bitcoin, and fewer new tokens entering circulation could impact bitcoin prices. That's why the halving is watched closely by miners and investors alike.
What Happened At This Halving?
After today's halving, the rate of new bitcoin created roughly every 10 minutes is 3.125. These halving events take place after every 210,000 blocks are validated or roughly every four years and were baked into the network's design when it was originally launched in January 2009.
After the halving, the block reward or subsidy associated with validating each new block of transactions on the Bitcoin network is cut in half. The block subsidy is the newly-created bitcoin that is included in the block as a reward to the associated miner. So in effect, the block subsidy for successful miners is now 3.125 bitcoin.
In addition to the subsidy, miners also collect any fees associated with the transactions in the block.
The halving block was mined by ViaBTC, and it was the 840,000th block mined on the Bitcoin network. However, it is interesting to note that the successful miner took home a little over 40 bitcoin or equivalent of more than $2.6 million in block subsidy and fees as their reward, according to data from mempool.space.
This fee is much higher than the a little over 7 bitcoin, worth a little more than $450,000 were earned in total fees for successful validation of the blocks that immediately came before the halving block. The reason for this spike is unclear, but perhaps it was people willing to pay higher fees to get their transactions among the 3,050 included in the halving block.
What Happens Next?
In the past, halvings have led to new all-time highs for the bitcoin price in the months following the events. However, this time has been different, as the bitcoin price has already reached a new all-time in the months prior to the halving.
Much of the recent rally was driven by the spot bitcoin exchange-traded funds (ETF), perhaps an indication the demand created by that market may have a greater impact on bitcoin prices than halving events.
According to Kraken Head of Strategy Thomas Perfumo, there is a degree of additional symbolism associated with this halving in terms of the illustration of bitcoin's apolitical, unwavering monetary policy at a time when many people around the world are having questions about their own currencies.
"At a time when you have people who are looking at their conventional currencies—inflation, interest rates, and the economic environment they live in—they see this alternative form of currency, bitcoin," Perfumo told Bloomberg.
However, analysts at JPMorgan and Deutsche Bank said that the impact of this halving was mostly baked into the current bitcoin prices and there isn't likely to be a large upward movement in the price in its aftermath.
According to these reports, the near-term effects of the halving may be limited to the bitcoin mining sector, where consolidation could occur as overall hashrate declines due to decreased profitability.
That said, there are also indications that miners could have avenues for increased revenue even if the halving does not lead to a price boom. This increased revenue would come via increased aggregate fees from transactions spearheaded by recent developments such as Ordinals and layer-two networks.
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FAQs
After the halving, the rate of issuance of new bitcoin as well as the rewards for successful bitcoin miners are cut in half. There can only be 21 million bitcoin, and fewer new tokens entering circulation could impact bitcoin prices. That's why the halving is watched closely by miners and investors alike.
What will happen after Bitcoin halving? ›
When Bitcoin undergoes a halving, the number of new Bitcoins that are made gets cut in half. Said differently, there's a 50% reduction in the reward miners receive for validating transactions and adding them to the blockchain.
What will happen in 2024 Bitcoin halving? ›
The much-anticipated bitcoin halving event has come and gone, quietly marking a historic moment in the world of digital assets. On April 19, 2024, the block reward for bitcoin miners was reduced by half, from 6.25 BTC per mined block to 3.125 BTC per mined block. However, you wouldn't know it from the lack of fanfare.
What does next Bitcoin halving mean? ›
Bitcoin halving is when the reward for bitcoin mining is cut in half. Halving takes place every four years. The next halving is expected to occur sometime in 2028. The halving policy was written into bitcoin's mining algorithm to counteract inflation by maintaining scarcity.
How long after halving does Bitcoin peak? ›
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.”
Will BTC halving increase price? ›
In the short term, that may do little to Bitcoin's price, but may encourage miners to produce less until the price rises to at least meet their cost of production. That's not to say that a halving won't raise the price of Bitcoin.
Should I buy Bitcoin before or after halving? ›
Although data insinuates that it isn't too late to buy Bitcoin and it remains an attractive investment before the April halving, investors must remember that Bitcoin rewards those who hold and weather the post-halving declines.
How much will 1 Bitcoin be worth in 2025? ›
Bitcoin (BTC) Price Prediction 2030
| Year | Price |
|---|
| 2024 | $ 68,194.13 |
| 2025 | $ 71,603.83 |
| 2026 | $ 75,184.02 |
| 2027 | $ 78,943.22 |
1 more row10 Years of Decentralizing the Future. JPMorgan said it expects bitcoin to fall after the reward halving. The bank's analysis shows that the cryptocurrency remains overbought. Miners will be most affected by the event, the report said.
Will Bitcoin halving affect other coins? ›
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.
A bitcoin halving event occurs every time an additional 210,000 blocks are added to the blockchain. The most recent halving event took place on April 19, 2024. The event cut the reward from 6.25 BTC per block to 3.125 BTC per block. Bitcoin halving helps manage the cryptocurrency's supply and maintain its scarcity.
Who owns the most Bitcoin? ›
Satoshi Nakamoto, the pseudonymous creator of Bitcoin, is believed to own the most bitcoins, with estimates suggesting over 1 million BTC mined in the early days of the network.
How many bitcoins are left to mine? ›
According to the Bitcoin protocol, the maximum number of bitcoins that can be created is 21 million. As of March 2023, approximately 18.9 million bitcoins have been mined, meaning there are around 2.1 million bitcoins left to be mined.
How high will bitcoin go in 2024? ›
Bitcoin, it found, is likely to hit an average peak price of $87,875 in 2024, with some experts predicting it will climb as high as $200,000. On the flip side, the average lowest price Bitcoin could hit by the end of 2024, is seen as $35,734, the report said, with some predicting it will fall as low as $20,000.
Will Bitcoin mining be profitable after halving? ›
Price, profitability, and perception are valuable aspects. It is important for companies dedicated to Bitcoin mining to know that the halving affects the less productive or less efficient miners. Although the production cost is the same, the reward is lower, which causes profitability to be very high.
What happens to my bitcoin after halving? ›
After the halving, the block reward or subsidy associated with validating each new block of transactions on the Bitcoin network is cut in half. The block subsidy is the newly-created bitcoin that is included in the block as a reward to the associated miner.
Will bitcoin mining be profitable after halving? ›
Price, profitability, and perception are valuable aspects. It is important for companies dedicated to Bitcoin mining to know that the halving affects the less productive or less efficient miners. Although the production cost is the same, the reward is lower, which causes profitability to be very high.
What happens when Bitcoin stops halving? ›
The block reward helps miners cover the high costs of mining. Every four years however, the algorithm cuts the block subsidy in half in an event called the halving. This process will continue until around the year 2140, when the flow of new bitcoin will drop from one satoshi per block to zero.
How many Bitcoin will there be after halving? ›
The halving process will continue until all 21 million Bitcoins are mined, with 28 more halvings anticipated after 2024. The next Bitcoin halving is expected to occur in the first half of 2028, at block number 1,050,000.
