• Bitcoin halving in 2024 is scheduled to take place in early Q2, reducing miner rewards by 50% from 6.25 BTC to 3.125 BTC.
• Despite historical price performance trends that suggest a positive outcome after halvings, one analyst believes that the market is now mature and US regulation could keep prices muted following the event.
• Bitcoin hash rate has been growing ahead of the halving event, indicating preparation from miners for reduced rewards.
What Is The Bitcoin Halving?
The Bitcoin halving process is an event encoded directly on the blockchain’s protocol and occurs roughly every four years. During this event, miner rewards are cut in half so that fewer coins will be emitted into the network going forward. This supply shock makes the coin scarcer, potentially supporting prices if demand stays constant. Miners have to cater for operational costs such as cooling and electricity bills during these times as their revenue from block mining rewards will be reduced by 50%.
Impact Of Past Halvings On Price
Past halvings have significantly impacted the price of Bitcoin with a 9100% surge following the first halving in 2012, 285% increase after the second in 2016, and 550% rally followed by a record peak of $69000 in November 2021 after third halving in 2020.
Mature Market & US Regulation Could Keep Prices Muted
Despite past trends, one analyst thinks that due to a more mature market backed by higher market capitalization and increasing United States regulations supporting commodity status of cryptocurrencies, prices may not surge post-halving as expected by some people.
Bitcoin Hash Rate Ahead Of Halving
Ahead of the upcoming halving event in mid-2024, the Bitcoin hash rate has been rising despite relatively depressed prices over recent months showing miners‘ readiness for reduced reward rates when it happens.