The Unique Aspects of Bitcoin Halving

Bitcoin’s upcoming halving event, set to occur at block 840,000 around April 20, is expected to be more favorable than previous halvings in 2012, 2016, and 2020. Halving events involve reducing Bitcoin miner rewards by half every 210,000 blocks, which happens approximately every 48 months. This time, the mining rewards will be reduced from 6.25 BTC ($418,800) to 3.125 BTC ($209,400).

Historically, Bitcoin’s price has increased after halving events, usually breaking previous all-time highs. The last halving in May 2020 saw Bitcoin’s price rise by 430% in five months, surging from $11,500 to $61,300 by mid-March 2021, surpassing the previous all-time high of $19,665 in December 2017.

The recent launch of spot Bitcoin exchange-traded funds (ETFs) in the United States has contributed to the positive supply-demand dynamic of Bitcoin. Experts believe that the ETFs have caused a significant change in Bitcoin’s supply-demand balance. Currently, the spot Bitcoin ETFs are acquiring 2,450 BTC per day, while only 900 BTC are being mined. After the halving, this number will decrease to 450 BTC per day. This creates an imbalance between supply and demand that will likely lead to a continuous but volatile increase in Bitcoin’s price.

The increased demand for Bitcoin through spot Bitcoin ETFs will coincide with the decreased supply from the halving, resulting in a multiplied effect on Bitcoin’s price. Experts anticipate that Bitcoin’s price will rise substantially higher as a result of this combination.

The health and security of the Bitcoin network have also improved since the last halving. The network’s hashrate, which measures the computational power used to secure the network, is now five times higher than it was during the previous halving. This means that it would require significantly more computing power and resources to attack the network.

Bitcoin’s hashrate has also become more geographically decentralized compared to the previous halving when Chinese miners held a significant share of the network. Miners are now migrating to regions like Africa and Latin America due to cheaper electricity prices, further contributing to the decentralization of the network.

The upcoming halving event, coupled with the launch of spot Bitcoin ETFs and the improved security of the Bitcoin network, creates a positive outlook for Bitcoin’s price, with experts predicting substantial growth in the coming months.