Since bitcoin became one of the largest cryptocurrencies, it has attracted a lot of attention for various reasons, but one is its price volatility. Another event associated with the cryptocurrency that always generates a lot of hype is bitcoin halving. This is one of the most anticipated events in the crypto world, and it occurs every four years. In this article, we provide an overview of bitcoin halving and what you should know about it.
What is Bitcoin Halving?
Before we explain what bitcoin halving is, you should know that Satoshi Nakamoto ( the creator of Bitcoin) has capped the number of BTC that can be mined to 21 million. Today, already 18.5 million are mined. The miners get a reward for approving a block of transactions in the blockchain network, and a reward is a certain number of BTC. Here it should be noted that do a very important job of not only securing the network but also, they invest time, energy, and they use of high-quality equipment.
When bitcoin was created, the initial reward was50 BTC per block, but the halving takes place when 210,000 blocks are mined, and it cuts the reward of the miners in half. So, it’s understandable that today a lot of people register on online trading platforms as a way to get BTC.
It doesn’t require a great investment per se, all you need is a good internet connection, and you can sign up on a trustworthy platform like the-bitcoinpro.com. The site features an advanced bitcoin trading system and award-winning customer service.
Also, you only need a deposit of at least $250 to become a member, and you can potentially earn $1250 in eight hours of trading on the site. However, keep in mind that the price of cryptocurrencies is volatile; hence, always complete your own research beforehand to make sure you make prudent decisions about your finances.
How it Affects the Price of Bitcoin?
So, the supply of BTC will get even more reduced, while the demand for BTC is likely to grow. This means that the value of bitcoin will enhance over time, as there’s a less supply of BTC. Furthermore, previously there was always an increase in the price of bitcoin after a halving. Also, this year months leading up to the event in May, there was also a surge in the price of bitcoin.
Otherwise, the first halving has resulted in a higher price of bitcoin, from $11 to $12 in November 2012. The reward for the miners was decreased from 50 to 25 BTC. It should be noted that year later, the price of Bitcoin increased significantly and reached $1038 on November 28, 2013.
The next halving took place in July 2016, and again the price increased from $576 to $650. Moreover, the next year Bitcoin again experienced a great surge in its price and reached $20,000.
The Halving in 2020
The last halving took place in May 2002, and the reward was reduced from 12.5 to 6.25 BTC. The price increased from $8,500 to $9,500. The rice remained fairly stable in this range even weeks before the actual halving it has risen to $10,000, before dropping back to $8,500. However, this doesn’t mean that the next halving will also result in a higher price of Bitcoin, but, based on previous data, it is expected to do so.
The Last Bitcoin Halving
These events will happen up to 2410; afterward, miners will get a reward based on the fees paid by the members of the blockchain network for verifying the transactions of the network. This is essential for miners still to have an incentive to approve the transactions of the blockchain network even without bitcoin tokens.
Although it’s expected the halving to have a long-term positive influence on the price of bitcoin, no one can know for sure. But still, if you own BTC, it’s important to keep an eye on the price in the following months. That being said, this is certainly another reason for more people to get acquainted with bitcoin and invest in BTC.