Key Points
- The upcoming Bitcoin halving event is predicted to take place in about two weeks, reducing the miners’ reward from 6.25 BTC to 3.125 BTC per block.
- Historically, Bitcoin’s halving events have been followed by significant price fluctuations, with the impact of the upcoming halving potentially already factored in by traders.
The next halving event for Bitcoin (BTC) is forecasted to occur in approximately two weeks. This event, which is based on Bitcoin’s average block generation time of 10 minutes, is estimated to take place on April 20 at around 1 p.m. ET.
Halving and Its Impact
The reward for miners on the Bitcoin network will decrease from 6.25 BTC to 3.125 BTC per block due to this halving event. Halvings in Bitcoin are designed to take place automatically every 210,000 blocks, which is roughly every four years.
Following a halving event, miners receive 50% fewer bitcoins as a reward for every block of transactions they mine and add to the blockchain. However, they continue to earn additional transaction fees for each block mined as usual.
In Bitcoin’s history, there have been three halving events. These events have reduced its block reward inflation from 50 BTC to 25 BTC in 2012, then to 12.5 BTC in 2016, and 6.25 BTC at the last halving on May 11, 2020. Eventually, there will only ever be 21 million bitcoins in existence.
Halving events will continue until the last bitcoin is expected to be mined around the year 2140. After this, miners will only earn from transaction fees.
Price Fluctuations and Predictions
Historically, Bitcoin halvings have been linked with significant fluctuations in the cryptocurrency’s price. These events have often preceded substantial bull runs in the bitcoin market.
The concept of the Bitcoin halving being “priced in” is often discussed every time the event comes around. Analysts David Duong and David Han from Coinbase stated that this is the first halving cycle which saw bitcoin breach its all-time high before the halving, which could indicate that the effect has already been priced in by savvy traders.
However, they added that there is still a collective belief that the halving might drive prices up, which could result in behavior that results in a rally.
This time, Bitcoin is closer to an all-time high relative to previous halving events. It has been noted that the approval of the spot ETFs contributed to a significant change in BTC’s supply-demand dynamics, which could impact price during and after the halving.
Analyst David Duong also agreed that the current bitcoin rally is largely a result of this new phenomenon amid spot ETF inflows and rising institutional interest, which have “irrevocably altered” the bitcoin market.
However, outflows from Grayscale’s converted higher-fee GBTC fund appear to be slowing, as are the overall flows for the spot Bitcoin ETFs since peaking at a net daily inflow of $1.05 billion on March 12, as bitcoin approached its latest all-time high of $73,836.
March was also a notable month for the spot Bitcoin ETFs by trading volume, nearly tripling February’s total to top $111 billion. However, after reaching a record $9.9 billion on March 5, as bitcoin first broke past its prior cycle peak of around $69,000, daily volume has declined, alongside the recent slide in bitcoin’s price.
