- Upcoming Bitcoin (BTC) halving is about to happen this month, April 2024.
- This is the fourth block-halving event of Bitcoin and is speculated to create multiple after-effects in the crypto markets.
- Watching out for Bitcoin (BTC) Hashrate, Mining Difficulty, Block Reward, etc. factors after this event takes place can provide you reliable indications on the price trajectory of the cryptocurrency.
What is Bitcoin Halving (2024 Edition)?
Bitcoin halving (sometimes 'halvening') is an operation that reduces the bonus for mining new blocks, meaning that miners earn straight 50 percent less bitcoins for validating new blocks. Bitcoin halvings are expected to occur once every 210,000 blocks are validated or roughly every four years until the network has produced a cumulative supply of 21 million bitcoins, which is the fixed total amount of Bitcoins.
Bitcoin halving is an important occurrence for traders as it regulates the number of bitcoins aggregated by the mining network. The supply of new coins is therefore reduced, and prices can increase if the demand sustains. Although this happened in the months before and after previous halves – which rapidly boosted bitcoin's price – the circumstances for each halving event are different and the demand for bitcoin will oscillate accordingly.Bitcoin Halving Data
It is estimated that the next bitcoin halving will take place in the week beginning 15 April 2024 when the block number exceeds 840,000.
The block reward would be dropped from 6.25 to 3.125 bitcoins thereafter. The exact time to produce new blocks is not known as the average time for the half-down varies by one block every ten minutes.
The above-populated list is not all as the Bitcoin (BTC) halving process is due every 210,000 blocks confirmed by the Bitcoin mining network. An estimate tells that this process will continue until the year 2140 when 21 million pieces of the cryptocurrency will be mined by the network successfully.
Bitcoin Halving: What Community Forecasts about Bitcoin Mining Hashrate?
Bitcoin Halving: Bullish Bets vs. Cautious Calls
As the April 2024 Bitcoin halving would be performed, it can possibly cause a ruckus in the mining sector.
BTC halving has historically resulted in declines in the hashrate—the total amount of processing power used for Bitcoin mining. Let's examine what transpired and what professionals anticipate:
- Historical Performance: The hashrate dropped by 11% to 25% after the first three halvings. This decline happened as a result of some less productive miners ceasing operations owing to lower profits from prizes that were half.
- Pre-Halving Predictions: With estimations ranging from 5% to 30%, many analysts anticipated a similar hashrate fall this time around. The upper end of the spectrum predicted more shutdowns, while the lower end represented the growing efficiency of mining rigs.
- The Current Situation: It's too soon to tell how exactly the halving will affect hashrate. Nonetheless, certain data points to a possible decline.
- Prospects: The hashrate's long-term trend is still unknown.
Experts Claim: Bitcoin Network Hashrates would fall 30% after Halving
Head of mining operations for Genesis Mining, Philip Salter predicts that the hashrate of the Bitcoin mining network would be some 30% lower after the Bitcoin halving if the price does not increase. If cryptocurrency prices continue to rise, on the other hand, it appears that after the block reward is decreased, the hashrate will remain stable. He also observed, "Most drops do not occur instantly because they can not suddenly turn off miners." However, he expects markets to recover if a drop happens.
“Midterm, the hashrate should recover quite quickly. Most [ASICs] that are turned off will be Bitmain S9, with an efficiency of around 90 W/TH. The new [ASICs] have ~30 W/TH, so they can deliver three times more hashrate at the same power consumption. That gives us a good estimate of how much hashrate can increase without new farms being built. ”
What happened after the third Bitcoin Halving in 2020?
Contrary to what some may have predicted, the 2020 Bitcoin halving on May 11th did not result in a simple price increase. Here's a breakdown of what actually happened:
- Short-Term Price Movement: No significant gain occurred right away. Before the halving, the price was approximately $6,900; a month later, it had risen to $9,850, a respectable but not spectacular amount.
- Delayed Bull Run: For the subsequent year, the larger tale came to light. After starting a massive uptrend, the price of Bitcoin shot up from about $11,000 in October 2020 to an incredible $60,000 by March 2021. This constituted a far larger rise.
- Potential Causes of the Delay: The precise reason for the delayed price spike is hard to determine. According to certain theories:
- Market Anticipation: Before the actual event, the market may have already factored in the impact of the halving.
- External issues: The 2021 bull run may have been more influenced by institutional investing and broader economic headwinds.
Overall, even though the price didn't spike right away following the 2020 halving, it did rise significantly within a year, maybe as a result of the halving's combined effects with other market pressures and economic reforms around cryptocurrency.
One critique of the nature of the cryptocurrency– including halves and a limited supply of 21 million coins – encourages users to save and not invest in the expectation that coins will become more valuable over the span of time. In past years, this can drive boom and buffer periods, with users only hosting coins to cash out at key rates. For similar purposes, some have termed Bitcoin as a pyramid (Ponzi) scheme, claiming that the architecture of the system has unfairly rewarded early users.
Final Verdict
It's still too early to render a decision regarding the April 2024 Bitcoin halving as of today, April 14, 2024. The actual halving is going to happen, but it will take some time for the full effect on hashrate and price to become apparent. Here's what we can predict:
- Short-Term Price Movement: It's unlikely that prices would rise sharply and suddenly. Significant price increases have traditionally happened months after the halving. But if the cryptocurrency can keep its charming demand, a potential upward trend can be experienced.
- Long-Term Price Impact: Over the course of the following year or two, the price may be affected by the halving. Experts are divided on this too; some anticipate a bull run like that of 2021, while others advise caution.
- Hashrate Dip: One typical post-halving occurrence is a drop in hashrate or the overall mining power. It is still unclear how much the reduction will be in April 2024.
To sum up, the situation of BTC halving is still being unfolded. To fully comprehend its impact on the Bitcoin ecosystem, we'll need to keep an eye on price movements and hashrate data over the upcoming months and years.