Bitcoin’s next halving is set for April 2024

Halving, what is it?

In the crypto world, the term halving refers to a mechanism that halves the rate at which new coins are issued. This reduction takes place periodically, every 4 years, and ensures that a cryptocurrency will continue at a constant rate of issuance until it reaches the maximum supply initially planned.

With Bitcoin, new coins are created on a regular basis as part of the block reward. In other words, every time a miner manages to validate a new block, he earns newly generated coins as a reward for his work.

1. It is via the mining mechanism that new bitcoins are created and integrated into the system. This process takes place approximately every 10 minutes, at a controlled, decreasing rate. As a result, halving guarantees that the block grant will be divided in 2 every 210,000 blocks, i.e. approximately every 4 years.
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Anticipating a rise in Bitcoin's price after halving?

The optimism surrounding Bitcoin's halving has often been linked to price fluctuations. Many investors are anticipating a recovery, or even a substantial rise, in the Bitcoin price after this event.

1. Although historical patterns generally suggest a rise in Bitcoin prices after halving, it's important to note that this trend is not guaranteed. Price trends will depend on the circumstances surrounding Bitcoin's halving in 2024, including the progression of adoption and other factors influencing demand.
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2. We should also point out that other recent factors, such as SEC approval of Bitcoin Spot ETFs, could disrupt historical patterns. This approval led to an increase in the price of Bitcoin, taking it back to its pre-halving all-time high. Traditionally, the Bitcoin price reached its all-time high of the previous cycle after halving, but this pattern is not observed in the current situation.
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Analysis of previous Bitcoin halving

When Bitcoin was launched in 2009, the mining reward was 50 BTC per block. Since then, three halving have taken place:

1. 1. The first halving took place in November 2012, halving the mining reward to 25 BTC. At the time of the halving, the Bitcoin price was around $12. Around six months later, on or around May 28, 2013, the price had climbed considerably to around $130, marking a significant increase.
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2. In July 2016, the second halving further reduced this reward to 12.5 BTC. The Bitcoin price was around $660 at the time of the halving. By January 9, 2017, the price had risen to around $900, demonstrating significant growth in value in just six months.

3. In May 2020, at the third halving, the reward was halved again to 6.25 BTC per block. The Bitcoin price was around $8,600 at the time of the halving. Some six months later, around November 11, 2020, the price had climbed to over $15,700, marking a notable increase in its value over this period.

1. These halving are essential to control Bitcoin's scarcity and inflation, ensuring that the total supply never exceeds 21 million and thus respecting Bitcoin's deflationary principles. Bitcoin's last halving is scheduled for 2140.
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Source: https://www.binance.com/en/events/bitcoin-halving, consulted on 27.03.24

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