What is Bitcoin Halving? Bitcoin Halving is an event where the block reward for miners on the Bitcoin network is reduced by half, this happens every 4 years. Bitcoin Halving often serves as the start of a new growth cycle for the entire crypto industry. So what is it about Bitcoin Halving that has such great power? Everyone, let’s find out in the article below.
To understand Bitcoin Halving, people can refer to some articles such as:
- Crypto Panorama 101 | Episode 2: What is Bitcoin?
- What is Fair Launch? Pros & Cons of Fair Launch
What is Bitcoin Halving?
Overview of Bitcoin Halving
As in the article What is Fair Launch? Advantages & Disadvantages of Fair Launch, we know that Bitcoin is the first and most successful Fair Launch project at the moment. With Fair Launch, Bitcoin will be brought to the market in only one way: “Miners add transactions and create blocks, the reward they receive is Bitcoin”.
Bitcoin Halving is the event where the above reward for miners will be cut in half after 4 years, equivalent to 210,000 Bitcoin blocks mined.
- January 2009: The reward of the original Bitcoin is 50 BTC.
- November 2012: Bitcoin rewards reduced to 25 after the first 4 years.
- July 2016: Bitcoin rewards reduced to 12.5 after the next 4 years.
- May 2020: Bitcoin rewards reduced to 6.25 after the next 4 years.
- 2024: Bitcoin rewards reduced to 3.125 after the next 4 years.
- 2028: Bitcoin rewards reduced to 1.5625 after the next 4 years.
- Year 2032: Bitcoin rewards reduced to 0.78125 after the next 4 years.
Just like that, the reward for each successful block on the Bitcoin network will gradually decrease after 4 years.
The Role of Bitcoin Halving on the Bitcoin Network
Bitcoin Halving is an event that greatly affects Bitcoin, which currently accounts for a large part of the entire crypto industry. Therefore, how Bitcoin Halving affects Bitcoin also affects the crypto market:
- Miner: Miners are the ones directly affected when their revenue in terms of BTC is reduced by half. This results in the sole supply of Bitcoin out to the miners’ market being reduced by half.
- Investor: The supply is reduced by half and if the demand is kept the same or increased from investors, this will push the price of Bitcoin up. This is essentially beneficial for investors holding Bitcoin as Bitcoin’s inflation rate continues to decline.
It can be said that Bitcoin Halving also pushes the Bitcoin network to become more open and decentralized. Because when there are fewer rewards, Miners will find ways to increase the power and number of their machines to mine more BTC. Not only that, the feeling that Bitcoin is increasingly rare makes many parties jump into mining and doing business in this field. This strongly promotes Bitcoin’s strong growth.
Crypto market after each Bitcoin Halving
It can be said that after the Bitcoin Halving event, the market entered a new growth cycle and reached a new peak about 1 year later (depending on each cycle, this number changes). However, in the last 4 halving events, Bitcoin always found a new peak after Bitcoin Halving occurred.
Let’s look back at the Halving time & the peak day.
|
Nr.Crt |
Halving Day |
Peak date |
Price at peak |
|---|---|---|---|
|
first |
January 2009 |
June 2011 |
$31 |
|
2 |
November 2012 |
November 2013 |
$1,172 |
|
3 |
July 2016 |
December 2017 |
$19,800 |
|
4 |
May 2020 |
November 2021 |
$69,000 |
|
5 |
Expected March 2024 |
Expected from June – December 2025 |
TBA |
If we look at history, after each Halving event, a new cycle will begin, including:
- Grow strongly.
- Declining sharply due to bubbles in the market such as the ICO bubble, Play 2 Earn, DeFi,…
- Go into the sideway phase and create a bottom then wait until the next Bitcoin Halving event.
Bitcoin Prediction In The Next Period 2024 – 2028
Current context
Currently, it can be said that the market has somewhat gone through the period of sharp decline that happened in 2022 with the collapse of Terra – Luna, Three Arrow Capital, FTX, Celsius, Voyager,… abuse of leverage. In my opinion, right now the market is in a sideway phase. At this stage the market has some of the following characteristics:
- The market mainly went sideways in a wide price range +- $10,000 price.
- The market may have waves of recovery after a year of decline in 2022, but in my opinion these are only slight recoveries and it cannot be confirmed that this is a new growth cycle for the market.
- There will be a lot of FUD in the market which is actually the case. FUD revolves around the SEC with the crypto market and companies and projects in the crypto market.
- The market will have very strong pump and dump phases to make even the most confident people leave the market.
For me, this could not be a better period to prepare knowledge, experience and finances for the next growth cycle.
The next cycle of the market 2024 – 2028
There are many Bitcoin price prediction models, but what we can confirm is that Bitcoin will create a new peak higher than the old one, and the new peak will be $100K, $200K, $500K, even $1M depending on the level. each person’s optimism, trust and evaluation.
For me, it is not important where Bitcoin’s peak is, but what our plan is at the present time by answering some questions as follows:
- How to divide portfolio? What is the investment strategy?
- What trends are likely to happen in the future? Which projects need to be tracked? Which project will you invest in? What is the buy, hold and sell strategy?
Actually, guessing the peak you think is completely unnecessary because at each moment we need to observe and feel the market to understand what the fomo level of the entire market is at.
Summary
Bitcoin Halving is an important event for the entire crypto market. Hopefully through this article everyone can understand what Bitcoin Halving is?
