What is Bitcoin halving?
The Bitcoin halving is a pre-planned event that occurs every four years and means that the reward to BTC miners for validating transactions is cut in half. The first three halvings occurred when the number of new BTC blocks reached 210 thousand. Halvings will continue until the network generates the maximum possible number of bitcoins – 21 million.
Halving can have a significant impact on the supply and demand dynamics of Bitcoin, which could potentially affect the price of the cryptocurrency. Therefore, crypto traders need to understand market sentiment and prepare for potential volatility during the halving period.
What happened before during the Bitcoin halving
The impact of halving on the BTC market is closely related to historical data and a number of other factors. It is difficult to establish a direct cause-and-effect relationship between halving and price, but historical data allows us to make assumptions. Here’s how past halvings have affected the price of BTC:
- First halving (2012): the block reward was reduced to 25 BTC, which caused the price to increase from $11 to $1,152 within a year.
- · Second halving (2016): the reward was reduced to 12.5 BTC, after which the price increased from $664 to $17,760 over the course of about a year and a half.
- Third halving (2020): occurred just during the COVID-19 pandemic and the associated crisis, reduced the reward to 6.25 BTC, contributed to the price increase from $9,734 to $68,000 within a year and a half.
Price forecast after Bitcoin halving for 2024
Please note that the price of Bitcoin can be extremely volatile. As a result, forecasts may be unreliable. BTC halving forecasts, which are based on research from November-December 2024, show the following: approximately 53% of investors worldwide expect the price of Bitcoin to fluctuate between $50,000 and $60,000 after the fourth halving. Another 30% of investors believe that the cost of cryptocurrency can exceed $80,000.
The Latin American market is especially optimistic about the upcoming BTC halving: 46% of investors expect the price of Bitcoin to exceed $100,000.
Is it worth investing in Bitcoin before the halving?
The decision must be deliberate. Here’s what you need to consider:
- Historical price trends. As we have already found out, the rate always grew after halving, but not immediately, but over the course of 1.5 years – and before this time, on the contrary, a decrease in price may be observed.
- Reduced mining activity, especially among less efficient miners.
- Market sentiment. Reducing supply can increase demand, which is also an important factor for increasing value.
- Network security. Halving plays a key role in maintaining the security and stability of the network in the long term.
Bitcoin halving is a significant stage that affects the entire ecosystem. The controlled supply of Bitcoin and the gradual reduction in coin creation are contributing to the shortage. However, you need to understand that exchange rate growth is not guaranteed, since it depends on dozens of different factors.
