The Bitcoin halving for 2024, expected for four years by crypto investors, has been finalized. The block reward has been reduced from 6.25 BTC to 3.125 BTC. The next reduction will take place in 2028, with the reward reduced to 1.5625 BTC. The 64th halving will occur around 2140, meaning all 21 million coins will have been mined and the issuance of new Bitcoins will cease. Once that happens, miners will have to find other ways to make money in the crypto world.
How Does Halving Affect Bitcoin Price?
At the time of writing, the Bitcoin exchange rate was around $57,000. Many analysts expect the halving to catalyze further BTC price growth in the long term.
Historically, with each new cycle following a halving event, the price of Bitcoin would reach a new high. For example, in late 2013, about a year after the first halving, Bitcoin hit the $1,200 mark. The next market cycle peaked at $20,000 per Bitcoin in late 2017 and climbed to $69,000 in late 2021 before crashing again. However, over the past six months, the value of BTC has already increased by around 140%. In comparison, over the same period, the price of Ethereum, the second largest cryptocurrency, increased by only 85%.
“The current situation is unique: Bitcoin, for the first time, surpassed the previous high before halving, reaching $73,000 in March 2024,” said Octa Broker financial analyst Kar Yong Ang. He added that demand for the US Bitcoin ETFs launched in January was a key factor in this price rise.
At the same time, miners’ income will drop exactly in half. As a result, they will have to spend twice as much time and twice as much electricity to obtain the usual amount of cryptocurrency. And since energy is not cheap, weaker players are expected to leave the market. In other words, we expect a shortage of supply amid growing demand.
Conclusion
The Bitcoin halving is a significant milestone in the history of the leading cryptocurrency, showing its limited issuance and inherent inflation-protection mechanisms. Many believe that Bitcoin, with its deflationary model, is well-positioned to become a reliable store of value in an unstable global economy, much like traditional gold, but only digitally.
If we draw historical parallels, Bitcoin is expected to enter an intense growth phase towards the end of 2024, after which it is expected to exceed $200,000. Current conditions are very different from those seen in 2020 as the demand for cryptocurrency is extremely strong due to ETFs, and its deficit is already being felt today.
Octa
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