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In this article to BITCOIN HALVING And the impact of halving on the price of Bitcoin is mentioned. In fact, Bitcoin halving is one of the events that happens every 4 years, during which the miners’ reward is halved; The effect of halving on the price of Bitcoin is that, as a result, we will face a decrease in the supply of Bitcoin and, as a result, an increase in its value. Bitcoin is a decentralized system and, unlike fiat currencies, no foreign organization or institution affects its activities..
If, like fiat currencies, the supply of Bitcoin is infinite, it will definitely lose its value one day. Hence with the process BITCOIN HALVING Bitcoin supply is decreasingslow and its value will increase. In the continuation of this section, more to BITCOIN HALVING , the effect of halving on the price of bitcoin, the countdown of bitcoin halving, the date of bitcoin halving 2024 and….we will pay.
Read more: Bitcoin price depends on what factors?!
BITCOIN HALFING DATE
The first Bitcoin block was created after its birth in 2009. At that time, Bitcoin miners or so-called miners received a reward equal to 50 Bitcoins. But the founder of Bitcoin, Mr. Satoshi Nakamoto , created its structure in such a way that after the creation of every 210,000 blocks, the wages of miners will be reduced by 50%. This happens every 4 years and thus about 210 blocks are produced every four years. But with the increase of miners, it can be predicted that maybe halving will happen earlier than 4 years or this number of blocks will be built.
In expressing the effect of halving on the price of Bitcoin, it can be said that a change in the price of Bitcoin causes a change in the price of altcoins. In fact, this law has been explained to prevent Bitcoin inflation and excessive mining, and it helps Bitcoin to be recognized and present as a valuable currency in the financial markets.
If this cryptocurrency has an infinite supply like fiat currencies, it will surely lose its value one day. For example, suppose that the amount of gold extracted from the earth is reduced by half every 4 years. If the value of gold is based on its rarity, then halving the production of gold every 4 years will increase its price; This is what happens after every bitcoin halving and causes its price to increase.
What is Bitcoin Halving?
BITCOIN HALVING The process of halving miners’ reward per block is called; This reward is actually the miner’s share that has mined the new block of Bitcoin. Word HALVING means halving and is from the root of the word Half It means taken in half. Bitcoin halving first happened in 2012.
In this incident, the miners’ reward was reduced to 25 and in 2016, the miners’ reward reached 12.5 bitcoins; The last bitcoin halving happened in 2020 and currently miners continue to operate with a reward of 6.25 bitcoins and this process will continue until 2140. In the final halvings, miners are only rewarded a few satoshis, and after that no new blocks are available.
Now, the question we come to is that considering the price of Bitcoin after the 2024 halving and the wages of miners that will reach 3.125 Bitcoins, is anyone willing to mine Bitcoins considering the amount of electricity consumed or not?!
Blockchain training and analysis of cryptos and the impact of halving on the price of Bitcoin
In this part of blockchain training and crypto analysis, I have mentioned blockchain technology and bitcoin analysis. In this video, I have explained that; The production of Bitcoin is done by miners and is not dependent on any special organization or institution and cannot be controlled by governments or special organizations. But the problem of this system was that if the production of Bitcoin is done like the Rial, we will face a decrease in its value.
For this purpose, the founder of Bitcoin adopted a method of not controlling the production of Bitcoin by a specific person and entity; Therefore, there was a need to limit miners . BITCOIN HALFING Also, for this purpose, the miner’s prize was halved every 4 years, and thus the supply of Bitcoin is stopped after a period of time and we do not face a decrease in its value. It is also said that on May 13, 2020 a HALVING is ahead and during that mining process becomes less economical and as a result the price of Bitcoin increases .
Read more: What are Elliot waves?
In the continuation of the blockchain training video and the analysis of cryptos and bitcoin, I have increased the fear index and the price of bitcoin, followed by the improvement of fundamental indicators. But due to the continued spread of the corona disease, uncertainty has been created in the financial markets. But according to Elliott’s theory, a weak buy signal has been observed. The ratio of profit to risk is more than 1 to 6 and it shows the entry into the market, which, of course, cannot be relied on alone, and my only goal in this video is to teach blockchain and analyze cryptos..
In the following video of blockchain training and crypto analysis, I have explained more about BITCOIN HALVING and the effect of halving on the price of bitcoin.
The impact of Bitcoin halving on miners
Bitcoin halving is an event that affects the mining economy. The two main sources of miners’ income are mining rewards and transaction fees; which are one of the main components of economic incentives for miners in order to protect the Bitcoin network and confirm transactions.
The halving of miners’ rewards that occurs during the Bitcoin halving process has a direct impact on the income of these people. After this happens, miners who face increasing operating costs may be less eager to continue operating; This problem can reduce the hash rate and participation in the Bitcoin network.
The impact of halving on the Bitcoin network
One of the most important effects of halving on the Bitcoin network is the halving of the inflation rate and the creation of new blocks of this currency. This trend has reduced the inflation of the network, which will lead to an increase in the value and price of Bitcoin due to the constant supply of 21 million units..
Although some small miners may not be able to continue working due to the increase in their costs, the transaction fees and loyalty of crypto fans, especially Bitcoin, who started their work with the slogan of a peer-to-peer monetary system, is an incentive for Adake. The work is considered to support the network .
In this case, due to the belief of these people in the continued work of the network, we may see the arrival of more miners to support the network. During this event, the Bitcoin network will become more secure and decentralized.
The impact of Bitcoin halving on capital flows
From an investment perspective, Bitcoin halving has direct effects on supply and demand. With the reduction of the inflation rate and the production of new Bitcoin blocks, the supply of this cryptocurrency will decrease, and even if the demand remains constant, based on the basic principles of economics, we should expect an increase in the price of Bitcoin..
In addition, Bitcoin halving generally leads to increased attention to this market and the hype around it. In this case, reducing the inflation rate and supply and waiting for price increase will intensify positive feelings among investors and traders.
Such optimism and future can lead to an increase in demand. Of course, it should be noted that during the halving event, the market sentiments were not always favorable and there is a possibility that the participants in the market may have a fad (FUD) become In fact, short-term price fluctuations create the possibility of conflicting feelings in the market.
What will happen after the last bitcoin halving?
The low cost of transactions when buying and selling Bitcoin is significant. Maybe the engineering of Bitcoin structure will increase the transaction cost in the future; But the main theory is that if the demand is more and the supply is less, the price of cryptocurrencies will definitely increase a lot.
After the last halving, miners will no longer be able to mine blocks and earn money from Bitcoin. In this case, Bitcoin miners only receive Bitcoin fees. In fact, these fees are the fees that network users pay for transferring their currencies.
Transaction fees ensure that miners are still motivated to maintain the network and mine blocks. In fact, the main idea is that competition for fees will keep miners going after the halving..
Blockchain training and Bitcoin analysis
In this part of blockchain training and analysis of cryptos and Bitcoin in particular, I have mentioned QUANTITATIVE EASING and QUANTITATIVE HARDENING . HALVING was mentioned in the above , which is fundamentally a positive point for Bitcoin;
Because Bitcoin is not under the supervision of any special organization and like fiat currencies, a large supply does not cause the currency to become less valuable.
Also, in this part of blockchain training and crypto analysis, it is said that unlike other currencies that have QUANTITATIVE EASING ; In Bitcoin QUANTITATIVE HARDENING we will have Actually QUANTITATIVE HARDENING or HALVING has limited the production of Bitcoin, and its liquidity will be fixed and limited, and this has made Bitcoin valuable .
In fact, in this video of blockchain training and analysis of cryptos, it is mentioned to express the value of Bitcoin based on its production rate. Further, in the analysis of Bitcoin, it can be said that the price has increased by 3.5% and the set of fundamental indicators shows a positive sentiment in the market. In the continuation of the video, Elliot’s analysis and the percentage of profit and… I will pay
History of Bitcoin halvings from 2009 to 2020
In 2009, each block reward was equal to 50 bitcoin units. After Bitcoin halving on November 28, 2012 (December 8, 1991), this value reached 25 BTC units, and then in July 2016 (July 19, 1995), it decreased to 12.5 units. On May 11, 2020, this value was halved to 6.25 units.
Bitcoin halving table
Bitcoin halving countdown
Below you can see how many days are left until Bitcoin halving:
Bitcoin halving date 2024 is predicted for May 5, 1403 (April 25). But because all the blocks are not always produced exactly every 10 minutes, it is not possible to specify an exact time for this event.
However, considering that this event takes place on block number 840,000, according to predictions, it should be expected in April or May 2024 (May 1403). At this time of BITCOIN HALVING, the block reward will go from 6.25 to 3.125 units.
What will be the impact of halving on the price of Bitcoin?
Bitcoin BTC traders and investors should keep in mind this systematic feature that the halving event basically brings a lot of confusion and instability to the price of this digital currency. The reason is that with Bitcoin halving, its supply will decrease and the value of the remaining currencies for mining will increase. Therefore, with these changes, there will be a profitable opportunity.
In the past history of Bitcoin, Bitcoin halving has had a significant impact on increasing the value of this cryptocurrency. For example, in the first halving event in 2012, the price of Bitcoin went from $12 to $150.00 within a year. At the second halving in 2016, even though the price of Bitcoin had reached $650, in December 2017 its value climbed to an all-time high of $20,000.
In the latest Halving event, the buying rate of Bitcoin was $787.8, and in the following months, we saw the explosion of its value. In recent months, the Bitcoin digital currency has again crossed its previous historical ceiling and reached $63,380. Meanwhile Halving , other elements such as extensive news coverage of cryptocurrencies, especially Bitcoin, have also caused price growth .
The third Bitcoin halving is also the BTC ecosystem in many ways has affected It was predicted earlier that the miners of the network will decrease drastically due to the decrease in the reward of Bitcoin miners.
But as we have seen, this did not happen due to the reduction of mining incentives, and last year, Chinese miners were forced to stop or relocate their equipment due to regulatory strictures. In fact, the halving event is usually associated with hype, speculation and extreme fluctuations, and it is impossible to predict how the market will react to it in the future..
BITCOIN HALVING is one of the fundamental factors affecting the price of Bitcoin
In this video of blockchain training and analysis of cryptos, I have discussed the impact of the economic conditions created by Corona on the price of Bitcoin and the fundamental factors affecting the price of Bitcoin. Considering that the fear index of Bitcoin has reached 12 and the amount of fear in the market has decreased;
Read more: Bitcoin price depends on what factors?!
But based on the bearishness of most of the indices, there is also the expectation of Bitcoin’s fall. Based on the Elliott wave theory, Bitcoin is expected to try again to conquer $7,000,000, which is also not clear. In addition, due to the impact of Corona on the markets and thus the price of Bitcoin, we may see a decrease in the price of Bitcoin. Another fundamental thing is bitcoin honing, which helps increase the price of bitcoin.
In fact, BITCOIN HALVING was created by Mr. Satoshi, the founder of Bitcoin, during which every 4 years, the award given to miners is halved, and this issue causes a low supply of Bitcoin and, as a result, an increase in its price .
In the following video, the blockchain training and analysis of cryptos to other fundamental factors affecting the price of Bitcoin and BITCOIN HALVING I have mentioned During this video and according to the current conditions of the market, entering the market is not recommended and it is better to do this in the most suitable position.
no With a little patience, you can use the possible increase in the price of Bitcoin during the halving for trading. There is nothing to worry about.
This event is not only specific to Bitcoin, but also happens to other currencies, especially Bitcoin forks like Litecoin. Some other cryptocurrencies, including Ethereum, Bitcoin Cash, Ethereum Classic, etc., use this process to prevent inflation..
With more miners joining the Bitcoin network and increasing the hashing power, the block finding time will decrease from 10 minutes. Of course, this changes by adjusting the network difficulty every two weeks or every 2016 blocks until this time interval reaches 10 minutes again. Due to the exponential growth of the Bitcoin network, the average time to find a block is always below 10 minutes, and this has caused the halving interval to decrease..
In the absence of this event, it would have been a long time since all the bitcoins had been mined. Therefore, miners received only transaction fees under the title of reward. Therefore, after 8 years, all bitcoins were mined and because its value was not enough, miners were reduced and the network was decentralised. There was also the possibility that Bitcoin would disappear completely.
Due to the reduction of mining rewards and less supply of cryptocurrencies after halving, the price usually increases.
