- The exciting conceptual event where the reward for Bitcoin mining operations is halved is called ‘Bitcoin Halving’.
- The maximum limit of Bitcoin held in the current market supply is 21 million, and 92.49% of this is in circulation.
- As long as the Bitcoin mining process continues, the last Bitcoin is expected to be mined in the year 2140.
Less than a year left for the halving event in Bitcoin; What does halving mean in Bitcoin? How will it affect the price of Bitcoin?
What Does Bitcoin Halving Mean?
‘Bitcoin Halving’ is the exciting conceptual event where the reward for Bitcoin mining operations is halved. The reward for the current year is 6.25 BTC. The upcoming Bitcoin halving will reduce it to 3.125, and this will likely end with the reward dropping to 0.
The maximum limit of Bitcoin held in the current market supply is 21 million, and 92.49% of this is in circulation, with the exact number being 19,423,618 BTC. This allows the block reward to continue until the year 2140. The first BTC halving started with 50 BTC in 2019.
However, the second Bitcoin halving reduced it to 25 BTC in November 2012. When the Bitcoin halving occurs, the number of rewarded tokens decreases, and this is done to increase the demand for Bitcoin.
Bitcoin mining is a process where new block discoveries usually occur every ten minutes or less. Each Bitcoin mining has a time constraint, and there are 1,461 days, totaling four years, where block discoveries can take longer than usual.
As long as the Bitcoin mining process continues, the last Bitcoin is expected to be mined in the year 2140. However, during this time, insignificant rewards will be received at consecutive intervals. Therefore, when the next Bitcoin halving occurs in 2024, a significant turnaround is expected. This will cause the current block reward to decrease to 3.125. This situation is an indicator that Bitcoin’s demand and value may increase in future years.
Can the Price of Bitcoin Drop During Halving?
Bitcoin halving does not create an impact that can decrease the price. Halving is an event where the block reward for Bitcoin is halved. So miners receive Bitcoin worth half the value for each block. This leads to a decrease in the supply of Bitcoin and miners being able to produce fewer new Bitcoins.
Historically, Bitcoin halvings have often led to price increases. This is because the decrease in supply remains the same or increases the demand. So, limited supply and potentially increasing demand can increase the value of Bitcoin.
However, the price of Bitcoin can change depending on many factors, and halving is just one of these factors. Factors such as the balance of supply and demand in the market, investor sensitivity, global economic conditions, regulations, and other factors can affect the price of Bitcoin.
As a result, Bitcoin halving alone does not decrease or increase the price. However, past experiences show that Bitcoin halvings generally contribute to price increases. However, like any investment decision, price expectations for Bitcoin should also be carefully evaluated and based on personal research.
