Home Investment Academy Bitcoin-halving 2024: What Do You Need to Know?

Bitcoin-halving 2024: What Do You Need to Know?

2021-05-07 16:32:20


What is Bitcoin-halving?

The so-called "halving" is a unique issuing mechanism of bitcoin. According to the Bitcoin white paper, this mechanism was designed when Bitcoin was born. Halving Bitcoin means that the reward for producing a new block is halved about every four years. This means that every time a Bitcoin miner validates a transaction, Bitcoin's revenue is reduced by 50%.


Why halving bitcoin?

After successfully mining a bitcoin, the bitcoin miner will receive a block reward-essentially a bitcoin payment. However, the process of halving Bitcoin follows the theory of cryptocurrency economics. Because the quantity of Bitcoin is limited and its supply decreases over time, it is possible to keep the price of Bitcoin "stable" and deflationary by reducing the total supply, which is why Bitcoin is halved.


Historical bitcoin-halving date

Halving Bitcoin is a quadrennial event. On November 28, 2012, Bitcoin halved for the first time, rising 77.65 times from $13.49 to $1047.5; the second halving occurred on July 10, 2016, when Bitcoin soared from $620 to $18711, a more than 30-fold increase. Bitcoin was halved for the third time on May 12, 2020, and the Bitcoin Block Award was reduced from 12.5 Bitcoins to 6.25 Bitcoins as Block 630,000 was dug up. The third official halving of Bitcoin did not lead to the bull market expected by the market, closing the day at $8821.43, up 2.9 per cent.

As for the volatility before halving, several industry insiders said in an interview that the main reason was that the expectation of halving Bitcoin was realized ahead of time. "the impact of the third halving of Bitcoin and the wider audience, the market is actually more concentrated and unstable." However, a halving of Bitcoin is bound to lead to a rise in the price of the currency, and the third halving may lead to a bull market in a year's time. As you can see, in each halving event, the number of bitcoins dug up and block rewards have been halved. By 2032, more than 99% of bitcoins will be mined, and it is estimated that 100% of bitcoins will not be mined until 2140.

The next half of Bitcoin is expected to happen on May 9, 2024. Halving the bitcoin this time will reduce the mining bonus from 6.25 bitcoins to 3.125 bitcoins.


Advantages and disadvantages of Bitcoin-halving

Halving in nominal value could be seen as a negative event, especially for bitcoin miners. However, the halving event may have a positive impact on investors and traders. As the price of Bitcoin rises after each halving, Bitcoin owners will benefit from a rise in the value of their assets. Halving demand for Bitcoin is often a good thing because of reduced supply, which is often seen as a major factor driving up the price of Bitcoin and other knockoffs in the future. But traders must also recognize the possible negative impact of halving bitcoin. Some analysts predict that halving could cause losses to other counterfeit coins. As mining costs suddenly double and miners may sell their reward bitcoins, Bitcoin may face a huge risk of collapse.

Halving bitcoin is often accompanied by price fluctuations, which can be positive or negative. Price volatility usually increases before and after the halving event. Traders can take advantage of fluctuations to make a profit. However, sharp price fluctuations may also make the pricing model elusive, thus affecting the implementation of trading strategies.


How to use Bitcoin-halving to make a profit

Previous halving events have led to a rise in the price of bitcoin. However, the environment for each halving is different, and demand for bitcoin is likely to fluctuate sharply, especially during the current pandemic. This has proved to be an economic test for even the most "stable" assets. For the encryption market as a whole, Bitcoin is often a bellwether of the market trend. When Bitcoin rises, most major cryptocurrencies usually keep rising for quite a long time, so counterfeit coins are positively correlated with the Bitcoin bull market. The term "a rising tide lifts all boats" is the most appropriate way to describe the impact on coins, which have been in a bull market after each halving in the past. Although the global economy is in turmoil and almost all assets are suffering losses, Bitcoin owners are likely to reap the benefits of halving again.

Risk Warning: The above content is for reference only, and does not represent JRFX’s position. JRFX does not assume any form of loss caused by any trading carried out in accordance with this article. Please consult your financial planner for your investment portfolios and manage your own risk.

JRFX is an online CFD broker providing more than 50 products for Forex, metals and commodities. Open a trading account within a minute. Deposit 100USD and download our MT4 trading platform now! We have unprecedented promotion program!

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