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, miners' rewards for processing new transactions will be reduced from 6.25 bitcoin to 3.125 (about $200,000)—a significant immediate reduction of revenue. As a result, mining will become unprofitable for many smaller operations.
What will happen after the Bitcoin halving? ›
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 is the result of 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 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.
Will Bitcoin halving drop price? ›
The bitcoin (BTC) price is likely to weaken after the reward halving, a quadrennial event that slows the rate of growth in bitcoin supply and looks set to occur around April 19-20, Wall Street giant JPMorgan (JPM) said in a research report on Wednesday.
Will Bitcoin prices go up after halving? ›
“It's pretty much Economics 101” that bitcoin prices go up after halving, according to Sevens Report analyst Tom Essaye, who explained that so long as demand doesn't decrease and new supply goes down, the “only thing left to move is price.”
Which coin will reach $1 in 2024? ›
With a strong development team and growing adoption, Cardano (ADA) has the potential to reach $1, offering a compelling investment opportunity for those looking to capitalize on the next big thing in blockchain technology.
Is Bitcoin halving bullish? ›
Bitcoin Halving Is Not Bullish
Thielen also cautioned investors about the upcoming halving on April 20th, which many assume will be a wildly bullish event for bitcoin. This expectation stems from the token's previous post-halving cycles which typically saw bitcoin race to new all-time highs.
Is Bitcoin halving good or bad? ›
Bitcoin halving is considered bullish because each event reduces the rate at which future bitcoins are created. This then boosts the scarcity and value of existing bitcoins.
Will Bitcoin go back up? ›
Our most recent Bitcoin price forecast indicates that its value will increase by 11.45% and reach $75,043 by May 22, 2024. Our technical indicators signal about the Bullish Bullish 90% market sentiment on Bitcoin, while the Fear & Greed Index is displaying a score of 70 (Greed).
Evidence of this can be found when analyzing Bitcoin's performance in the year halvings occur. On average, Bitcoin has increased roughly 125% in halving years. However, the year after a halving tends to produce the best gains. In the year after a halving, Bitcoin returned a whopping 415% on average.
How many days after Bitcoin halving does it hit peak? ›
Twice, from nadir to all-time high it's about 1,065 days (1,062 and 1,068). From halving to all-time high it's been about 535 days (525 and 548).
What will happen when Bitcoin halves in 2024? ›
The upcoming 2024 halving will see this reward decrease from 6.25 BTC to 3.125 BTC per block, a change that aims to reduce Bitcoin's inflation rate and enhance its scarcity. Read a more in-depth look at the concept of halving.
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 $20,000.
How much is Bitcoin projected to be worth in 2025? ›
How much will Bitcoin be worth in 2030? ›
Bitcoin Price Prediction 2025-2030
| Bitcoin Price Prediction | Potential Low ($) | Potential High ($) |
|---|
| 2027 | 152,837 | 169,047 |
| 2028 | 174,063 | 192,908 |
| 2029 | 204,634 | 239,559 |
| 2030 | 277,751 | 347,783 |
2 more rowsPrice, 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 will happen in 2024 Bitcoin halving? ›
The next bitcoin halving is expected to occur in April 2024, when the number of blocks hits 740,000. It will see the block reward fall from 6.25 to 3.125 bitcoins.
How does the Bitcoin halving affect investors? ›
“The halving could influence the valuation and market dynamics as investors recalibrate their portfolios in response to shifting supply dynamics in Bitcoin, for example, with the advent of the spot Bitcoin ETFs, investors may prefer to gain exposure through that rather than Bitcoin miners.”
