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Bitcoin Halving 2024 – How Will it Affect Bitcoin?

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Photo by André François McKenzie Avatar of user André François McKenzie André François McKenzie on Unsplash

A Bitcoin Halving or Halvening is a phenomenon where the reward of every new block mined is halved. Let’s say that you have earned 1 Bitcoin by mining. After the halving, you will receive 0.5 or half of Bitcoin for the same computing power.

But why is Bitcoin halving important, and how will it affect Bitcoin? Let’s find out!

What is Bitcoin Halving 2024

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Bitcoin halving is an event that divides the number of rewards by two to keep the demand for the coin high. Bitcoins are scheduled to be halved after every 210,000 blocks have been generated.

The halving phenomenon happens every four years, and it will keep halving until Bitcoin reaches its maximum of 21 million Bitcoins. Bitcoin halvings are important for crypto traders because it keeps the supply of new coins less, creating a stable crypto economy.

Hence, the more it’s limited, the higher its demand will get, which is the ultimate goal of Bitcoin. After all the blocks are mined, it is expected that Bitcoin will reach its all-time high since no one will be able to mine the coin anymore.

Even though the previous halvings have increased the price of Bitcoin, it can also fluctuate the price. So let’s talk about when is the next Bitcoin halving.

When is the Next Bitcoin Halving?

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The next Bitcoin halving is set to occur in April 2024. After the total blocks of Bitcoin hit 740,000, the reward for block mined will fall from 6.25 to 3.125. Even though the exact date is unknown, according to speculation and maths, it will occur somewhere in April 2024.

Since Bitcoin’s average is one block mined every ten minutes, we might see an earlier halving mechanism if the mining increases. The halving time depends on when the 210,000 blocks are mined. Hence, let’s say the current mining increases to 20 blocks per ten minutes, then the halving will be moved to a year before.

The Previous Bitcoin Halving

The previous halving also led to a significant change in the mining ecosystem. As the block reward was reduced, mining became less profitable, and many miners were forced to shut down their operations. This led to a consolidation of mining power, with larger mining pools dominating the network.

The last halving occurred on 11 May 2020. The rewards were 50% lowered, and the Bitcoin mining rate came from 12.5 to 6.25 Bitcoin. But did it have any effect on the pricing of Bitcoin? Yes, absolutely! Bitcoin rose from $6,877.62 to $8821, a massive increase quickly.

Even though halving is a pre-programmed phenomenon, Bitcoin kept rising after this halving and reached an all-time high of $49504 on 11 May 2021. This can also be because of the pandemic, but thanks to various aspects of the world, Bitcoin’s demand went sky-high, forcing its price to go up at an unnatural rate.

The rising price can also be seen in the previous halving of 2016 and 2012, where we saw a strong price increase for Bitcoin. However, even after a big price drop after 12-17 months of halving, Bitcoin has continued to become the most stable coin in the history of crypto.

How will Bitcoin Halving Affect Bitcoin?

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Bitcoin halving will impact the coin, including the price, mining ecosystem, and security. Even though halving might not sound like a big deal, it’s something all investors and miners should take seriously. Here are some of the ways halving will affect Bitcoin in 2024.

Price of Bitcoin

One of the most notable effects of Bitcoin halving is its price. Bitcoin’s price is influenced by supply and demand, and the halving event reduces the rate at which new Bitcoin is introduced into the network. This reduction in supply, coupled with an increase in demand, can lead to an increase in Bitcoin’s price.

Final Verdict

In the past, the price of Bitcoin has increased significantly after each halving event. For example, after the 2016 halving, the price of Bitcoin increased from around $600 to over $20,000 in late 2017. However, it’s essential to note that past performance doesn’t guarantee future results, and various factors beyond the halving event can influence Bitcoin’s price.

However, the good news for investors or people who already own Bitcoin is that they might get a good amount of benefit from already owning the coin. Lastly, for investors who are looking to buy Bitcoin, you should be on the lookout for the halving, since that’s usually where the price of the coin rises the most.

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