Bitcoin halving refers to a programmed event in the Bitcoin network in advance and it marks the reduction of the reward by half and given to Bitcoin miners every four years. It is a pre-programmed activity/event that happens whenever there is a mine of every 210,000 blocks (hence in the pre-programming supposed to happen after every 4 years till the mining of the last block probably around the year 2140). This reduction of mining rewards is a programmed system that keeps in-check the supply of Bitcoin thereby preventing inflation. Heard of governments increasing money supply/printing more fiat local currency due to political or elite selfish interest and ensuing skyrocketing of inflation? Bitcoin solves this and does not have inflation and this is why at Binusu.com we are always excited about whatever is happening in the Bitcoin industry.
At the time of this writing, Bitcoin price has shot up to $62K and many within the ecosystem opine this could be a start of a bull-run and we may beat the past all time high of $69,000. Different factors drive the price of bitcoin fundamentally law of demand and supply, simply put more people buying Bitcoin the price goes and vice versa. Noteworthy, the last few days in the month of February has seen Bitcoin ETFs lead the party of top 25 global ETFs with some days the ETFs commanding an inflow of more than $4.5 billion signaling a strong demand for the product since launch. More so, the number of outflows previously experienced by leading Bitcoin ETFs issuing firms have significantly dwindled. Initially, before the approval of Bitcoin ETFs, investors could not liquidate the asset due to the firm’s strict terms and huge fees. However, immediately, after the approval, investors who initially held the Bitcoin ETF products went on a rampage by selling this investment leading to huge outflows from the firms issuing the ETFS. On an interesting twist this trend has been on the decline the last few weeks in fact to the lows of 0.4 million last week compared to a total of $2.2 billion in a single week of January after the approval. All this points us to a new trend where crypto users and investors are buying and holding more Bitcoins with expectations of taking advantage of new high price points. It is going to be interesting to watch what will happen to Bitcoin price the next few days. Resources following the event forecasts the event to happen between April 13th to 20th 2024.
A Look at Bitcoin Halving History
The first Bitcoin halving happened on November 28th 2012 and it resulted in slicing the Bitcoin reward to miners by 50 percent as it is the norm from 50 to 25 Bitcoins for every block. The community did not anticipate much in terms of Bitcoin price jump days to this event. However, at the onset of early days the year 2013 the price shot from $12.20 during the halving to over $1000 by end of that year marking the first ever Bitcoin bull run. Even though the impact was not immediate and within days after, the network enthusiasts have taken their lesson and taken every Bitcoin halving with a price rally making the event newsworthy.
The next halving was on July 9th 2016 and by now the Bitcoin community was ready to take advantage of the coming Bitcoin price rally. The reward to miners was reduced from 25 to 12.5Bitcoin. Months later in 2017 Bitcoin had the biggest price increase to $20,000 and by now the cryptocurrency ecosystem was no longer a preserve of techies alone as the market was thrown into the global limelight. It led to an eruption of an entire ecosystem, new projects, new ideas and an interesting feature of this bull run, Binusu.com was also born! It’s nostalgic that we’ve been here in this nascent industry for this long!
May 11th 2020 was the third Bitcoin halving event, and once again the reward to miners as programmed in the Bitcoin economic model reduced to 6.25 Bitcoin per block mined. By now almost everyone is having debate on what Bitcoin is and speculation rife that it is a time for institutional adoption of Bitcoin and other cryptocurrencies. More so, using the asset for hedging against inflation. It was not until 2021 when the bull run kicked in pushing the price to slightly over $69,000 mid-November.
Again, we are at another hall-mark of a Bitcoin bull where mining reward will decline to 3.125 Bitcoin per block. The community and investors have learnt from the past halving events and those who lost are eager to leverage on the coming post halving bull run. It is important to note this is not financial advice but an informatory feature aimed at educating crypto curious people. Therefore, undertake your own research and make informed decisions as well as do not move money that you can’t afford to lose into Bitcoin as the price is very volatile. One needs to know when to enter and exit the market without making losses of their hard-earned money. Moreover, part of the research should empower you to understand the product like we are doing at binusu.com so you can inform investment decisions.
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