Bitcoin halving, the much-anticipated event, is on the horizon. Investors and enthusiasts are getting ready for what could be a game-changer in the crypto market. According to insights from IntotheBlock, one of the leading analytics platforms, Bitcoin halving is set to occur in just 12 days, changing the supply dynamics of the most famous digital asset globally.
As the clock winds down, grasping two pivotal aspects of this impending halving is crucial. Firstly, Bitcoin block reward itself is expected to undergo a halving reducing from 6.25 BTC per block to 3.125BTC per block. The cutback on block rewards illustrates a significant decrease on how new Bitcoins are produced resulting into annual inflation rate falling drastically at around ~0.8%. This change in the world’s supply dynamics has wide implications on cryptocurrency ecosystem.
One effect is that it can reduce sell pressure in the market. There could be scarcity because fewer new Bitcoins will come into circulation, which might lead to an increase in prices due to more investor interest.
Also, it is worth noting that just before the reduction of block rewards, miner revenue measured in USD has been on a historical rise. The surge can be attributed to the increasing value of Bitcoin which made up for this reduced emission rate. Therefore, miners still find securing the network cost effective and hence maintain the integrity and resilience of Bitcoin blockchain.
Insights from Previous Bitcoin Halving Events
In examining the historical precedent here, the detailed analysis of Bitcoin’s price movements before its previous halving reveals some interesting things. Importantly, Bitcoin’s price has surged following each halving due to growing market demand and the slowing rate at which miners created new Bitcoins. However, it should be noted that the percentage increase in price post-halving has been on a downward trend over time.
For example, after the first halving, its value shot up from $13 to $652, representing an incredible rise of 4,802%. Subsequent halvings, though experiencing considerable price rises, have seen a gradual narrowing down of the percentage growth. This indicates that the Bitcoin market is maturing, and future halving events might not result in higher prices as experienced before.
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