- Summary:
- Bitcoin halving is around the corner and the hype is building up fast, especially since Bitcoin already hit its ATH. We tell you what you need to know about it.
To go straight to the question, “when is Bitcoin halving?”, the straight answer is that there’s no specific date in the calendar, but the timeline is mid-April 2024. However, many experts estimate that it will happen between April 19th-April 20th. The crypto ecosystem is certainly fired up! But why? you may ask.
The event has always been associated with soaring of Bitcoin price and overall crypto market rally, thanks to Bitcoin’s status as the market bellwether. But there’s more to that-this year’s event will take place after Bitcoin hit its new all-time-high, unlike last year when the ATH came months after the halving. Therefore, we could see higher volatility and potentially multiple all-time highs.
What is Bitcoin halving?
Bitcoin runs on proof-of-work mechanism, where computers connected to the Bitcoin network (or nodes) have to validate transactions logged into its ledger. Miners are a group of computers that confirm the legitimacy of transactions logged in a block. In return for their efforts, miners are rewarded with Bitcoin.
Bitcoin (BTC) halving is an event that takes place every four years, whereby the reward for mining a block of Bitcoin gets reduced by half. The first reward for seolving a block was 50 Bitcoin. Since then, Bitcoin has undergone three halving events since 2012 as listed below:
- In November 2012, the reward was reduced to 25 BTC per block
- In July 2016, the reward reduced to 12.5 BTC per block
- In May 2020, the reward reduced to 6,25 BTC per block
The next halving will take place on April 19, 2024 and the reward will reduce to 3.125 BTC per block. The final halving will be in 2140.
The impact of Bitcoin halving
As halving results in a fewer number of Bitcoin being brought into circulation, it has far-reaching repercussions. Fewer coins mean that miners and mining companies get reduced rewards for their efforts. However, with fewer coins being minted out, the resulting “scarcity” theoretically drives prices up. Therefore, halving is Bitcoin’s mechanism of tackling inflation, by keeping supply scarce. As of now, 19.6 million Bitcoin out of the total supply of 21 million are in circulation.
The last halving event in May 2020 triggered a historic market rally that saw Bitcoin price rise from about $9500 to $69000 in 20 months. The rally also saw altcoins climb to historic highs, with meme coins like Dogecoin and Shiba Inu churning out millionaires out of sub-$50 investments.