For the last couple of weeks, bitcoin halving generated a large number of traffic on Google search.
The wait is over! The most anticipated event in crypto market, Bitcoin halving is completed after almost four years. Since its creation by the pseudonymous figure named Satoshi Nakamoto, Bitcoin has been structured to possess a definite supply of 21 million tokens worldwide. The Bitcoin halving refers to an “Alteration in the foundational blockchain technology of Bitcoin.” It is aimed to reduce the rate of generating new coins. This is the fourth halving incident in Bitcoin’s history. Meanwhile, there is no specific dates for Bitcoin halving. Generally it happens once in four years. It is predicted that, bitcoin halving will continue to happen till 2041 until all Bitcoins been mined.
In this article, we will discuss about probable impact of Bitcoin Halving on market.
In the first bitcoin halving in 2012, the reward dropped from $50 to $25. The most recent bitcoin halving will reduce the reward to $3.125. This is equivalent to approximately $200,000 at current prices, with Bitcoin trading at $64,000 as per April 19 reports.
According to the creator Satoshi Nakamoto: “Total circulation will be 21,000,000 coins. It’ll be distributed to network nodes when they make blocks, with the amount cut in half every 4 years. first 4 years: 10,500,000 coins next 4 years: 5,250,000 coins next 4 years: 2,625,000 coins next 4 years: 1,312,500 coins etc…”
Roughly once every four years the supply inflation rate of BTC are cut to half. As per recent time, approximately 900 BTC are mined daily and that figure will decrease to 450 BTC after the ongoing halving.
In the past, during four bitcoin halving events, bitcoin price reached all-time highs.
Let's be honest, worldwide, economy is not so stable. During the last bitcoin halving in May 2020, the economic situation was totally different. Currently, the geopolitical scenario is also not steady. This led to an unusual downturn in crypto market. During the Asia session on April 18, Bitcoin saw a decline exceeding 5.5%, falling to $59,961 due to ongoing geopolitical tension in middle East. Will it change the market scenario this time? The time will only tell.
There are numerous predictions. We will be discussing about one important prediction.
This programmatic and planned reduction in Bitcoin's supply may enhance the demand. However, the fulfilling this demand depends on numerous factors including selling pressure, regulatory shifts, geopolitical scenario, broader macroeconomic landscape, and so on. By analysing all those aspects, it is predicted that, 2024 Bitcoin halving is going to have a positive influence on Bitcoin’s price.
Rajagopal Menon, VP, WazirX, said, “After the halving, Bitcoin typically enters a phase of sideways movement, which can be termed as reaccumulation. This phase generally occurs at levels around old all-time highs, preparing the market for the next impulsive wave of price increases.”
“Historical data shows that after the reaccumulation phase post-halving, Bitcoin tends to experience a parabolic rise in price. This pattern is evident in the discussions of post-2020 halving events, where a significant upward movement followed the halving and reaccumulation phases,” he continued.
As we look forward, the most recent Bitcoin halving will surely have both obstacles and opportunities.
