Key Points
- The 2024 Bitcoin halving event has occurred, cutting Bitcoin miner rewards in half.
- From now on, until the next event, BTC miners will receive 3.125 BTC per block instead of 6.25 BTC.
The 2024 Bitcoin halving has just occurred, slashing Bitcoin miner rewards per block from 6.25 BTC to 3.125 BTC. This means lower inflation for Bitcoin and probably a higher price for the coin.
The technical event is written in Bitcoin’s code and it’s set to happen every four years, and it’s reducing the pace at which new Bitcoins enter the market. As there will only be 21 million Bitcoins ever, the halving event is set to create more scarcity.
Halving happened every 210,000 blocks, and this year’s event occurred when the block height reached 840,000.
Bitcoin halving impacts token supply dynamics, market sentiment, and adoption
Bitcoin halvings are designed to regulate the supply of new Bitcoin tokens, and history has demonstrated that the event had a significant impact on token supply dynamics, market sentiment, and adoption as well.
Halvings usually tend to enhance the visibility of Bitcoin, leading to an increase in price and adoption rates. They also have the ability to stimulate discussions related to blockchain technology, Bitcoin network dynamics, and crypto in general, leading to more education for enthusiasts who are interested in joining the crypto industry.
Even if historical patterns have proven that Bitcoin’s price increased and the crypto adoption rose in the months following the halving event, this year’s halving could prove different, as Bitcoin and the surrounding scenery marked unprecedented moves.
But what’s important to highlight is that even with the rising geo-political tensions pre-halving, the market managed to keep calm, and the short price dips were rapidly overturned with significant rebounds with traders remaining focused on the 2024 event.
Bitcoin halvings have historically produced powerful effects on the crypto industry as a whole and on the broader financial ecosystem as well.
Apart from price-related effects and higher attention, halvings are usually associated with long-term increases in adoption, as Bitcoin’s heightened visibility during the pre-halving and post-halving periods usually tend to stimulate newcomers to explore the crypto industry.
Also, Bitcoin’s halving triggers a reevaluation of the token’s underlying technology and network dynamics as miners are navigating the transition. The halving event manages to intensify discussions about network security, transaction fees, and scalability solutions.
All these contribute to fortifying the robustness of the Bitcoin network, boosting confidence among users and businesses alike and resulting in a more stable and secure environment for adoption.
Shifting interest from BTC miners to Bitcoin ETFs
As halvings reduce miners’ profitability margins, this generates additional BTC sell pressure from miners, while accelerating consolidation in mining operations and mining pools.
This year, the effects of the halving could be different for miners, as the investor’s interest slightly shifted from miner shares to Bitcoin ETF products that had been approved at the beginning of the year in the US and about three months after, by Hong Kong as well.
Regardless, chief executives of the mining companies remain bullish, addressing low-cost operations, more effective equipment, and the growing demand for Bitcoin. Also, miners are now betting on more demand from the new Bitcoin ETFs that will push prices higher in order to mitigate the negative impact of the halving.
But overall, with each of the halving events, the strong need for efficiency and innovation strengthens, driving technological advancements that enhance the Bitcoin network’s performance and increasing interest to a broader audience.
