Thursday, July 25, 2024

Next Bitcoin Halving Scheduled for April 2024, Here’s Why It’s Important

Bitcoin, the first cryptocurrency ever invented, is the most expensive crypto asset that’s currently reigning over the sector since its inception in 2009. At the time of its creation, its anonymous creator known by the pseudo name Satoshi Nakamoto had capped the total supply of Bitcoin at 21 million tokens. This essentially means that no more Bitcoin tokens will be generated if the number of Bitcoin in supply reach 21 million. In order to keep that from happening, a process of ‘Bitcoin halving’ happens at regular intervals.

The process of Bitcoin halving occurs after every 210,000 blocks are mined on the Bitcoin blockchain. After halving, the block reward that is obtained by miners is slashed in half – this reduces their incentives for mining Bitcoin blocks and slows down the addition of new coins into the network. The process of halving roughly happens every three to four years – that’s how long it takes for 210,000 blocks to be mined on the Bitcoin blockchain. After Bitcoin was created in 2009, the first halving process happened in 2012. At the time, the reward for mining Bitcoin went from 50 BTC to 25 BTC.

In the second and third halving processes, that happened in 2016 and 2020, the incentive for mining BTC went from 25 BTC to its current price of 6.25 BTC. BitPanda keeps a track of the Bitcoin halving history.

With Bitcoin currently trading at the price point of $42,812 (roughly Rs. 35.5 lakh), 6.25 BTC amounts to $269,465 (roughly Rs. 2 crore) — which is the reward value for Bitcoin miners. In total, the Bitcoin halving event is only scheduled to happen 64 times – as specified in the coding that was compiled by Satoshi Nakamoto.

Importance of Bitcoin Halving in 2024

With halving being around two months away, market analysts predict that the price of Bitcoin will spike, subsequently leading to the rate hikes for several other cryptocurrencies. The year following the halving is when BTC clocks most growth, value-wise.

This year in April, the total number of mined Bitcoin blocks will reach 840,000. With this, the BTC reward price for the miners could go as low as 3.125 BTC or $133,956 (roughly Rs. 1.1 crore).

The investor predictions for Bitcoin’s price around the 4th halving seems to be varying across markets, Bitget said in a recent study. Around 53 percent of investors globally anticipate the price fluctuating between $30,000 (roughly Rs. 24.8 lakh) and $60,000 (roughly Rs. 49.7 lakh), while 30 percent believe it would breach the mark of $60,000.

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