The
2024 Bitcoin halving, which crypto investors have been expecting for four
years, has been finalised. The reward per block has been reduced from 6.25 BTC
to 3.125 BTC. The next cut will occur in 2028, with the reward reduced to
1.5625 BTC. The ultimate 64th halving will occur around the year 2140, which
will mean that all 21 million coins have been mined, and the issuance of new
Bitcoins will cease. Once this happens, the miners will have to find other ways
to make money in the crypto world.
How does halving affect the
Bitcoin price?
At
the time of writing, the Bitcoin exchange rate is around $57,000. Many analysts
expect the halving to catalyse further BTC price growth in the long term.
Historically,
with each new cycle following a halving event, the price of Bitcoin reached a
new high. For example, in late 2013, about a year after the first halving,
Bitcoin reached the $1,200 mark. The next market cycle peaked at $20k per
Bitcoin in late 2017 and went up to $69k in late 2021 before collapsing again.
However, in the last six months, the value of BTC has already risen by about
140%. In comparison, over the same period, the price of Ethereum, the second
most crucial cryptocurrency, has only increased by 85%.
‘The
current situation is unique: Bitcoin, for the first time, exceeded the previous
high before halving, reaching $73,000 in March 2024’, said Kar Yong Ang, Octa
Broker financial analyst. He added that demand from the U.S. bitcoin ETFs
launched in January was a vital factor in that price rise.
At
the same time, miners’ revenues will drop by exactly half. As a result, they
will have to spend twice as much time and twice as much electricity to get the
usual amount of cryptocurrency. And since energy is not cheap, the weakest
players are expected to leave the market. In other words, we expect a supply
shortage against the backdrop of increasing demand.
Conclusion
The
halving of Bitcoin is a milestone in the history of the major cryptocurrency,
which shows its limited issuance and inherent mechanisms to protect against
inflation. 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 should enter an intense growth phase
around the end of 2024, after which it should exceed $200,000. The current
conditions are very different from those observed in 2020 because the demand
for cryptocurrency is extremely high due to ETFs, and its deficit is already
felt today.
Octa
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