Chris Curl,
Editor
Oct. 3, 2023
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— Chris
Your Handy Guide to Bitcoin Halving 2024
Understanding Bitcoin Halving - A Key Element in Bitcoin's Economics
The Bitcoin halving, an integral part of the cryptocurrency's design, plays a pivotal role in its long-term sustainability and value proposition. This process occurs approximately every four years, specifically every 210,000 blocks mined. The primary outcome of Bitcoin halving is the reduction of the mining reward, causing the issuance of new Bitcoins to decrease by half.
The very foundation of Bitcoin's architecture hinges on this event. It was strategically implemented to establish a controlled supply of Bitcoins, ensuring that it remains a deflationary asset over time. Let's delve deeper into the concept of the Bitcoin halving and its historical significance.
The first Bitcoin halving took place on November 28, 2012, ushering in a reduction in mining rewards from 50 Bitcoins to 25 Bitcoins per block. Subsequently, on July 9, 2016, the second halving occurred, further reducing rewards to 12.5 Bitcoins.
Most recently, on May 11, 2020, Bitcoin experienced its third halving, cutting the reward in half once again, to 6.25 Bitcoins. This cyclical event has profound implications for the Bitcoin ecosystem, influencing everything from miner profitability to the asset's price dynamics.
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I tend to think that Satoshi designed Bitcoin in such a way to have these clearly defined halving cycles in an effort to create a perpetual wealth machine for regular people in a world of manipulated fiat currencies and inflationary pressures.
One simply has to buy the dips and sell the rips.
Countdown to the Next Bitcoin Halving in 2024
Anticipation is building in the world of cryptocurrency as Bitcoin's next halving is set to occur in April 2024. As of today, we've witnessed 729,405 blocks mined, and the countdown is underway for the upcoming halving when the block count reaches 939,405.
During this impending halving, the mining reward will undergo yet another reduction, falling from 6.25 Bitcoins to 3.125 Bitcoins per block. This alteration in rewards is poised to impact miners, potentially reshaping the landscape of Bitcoin mining.
Historically, Bitcoin halvings have been associated with surges in the asset's price. And even though the macro economic environment has changed, Bitcoin is still poised to see positive price movement after the next halving if not earlier.
Bitcoin Halving vs. Bitcoin Halvening - The Semantics Debate
In the cryptocurrency community, you might encounter two different terms used interchangeably: "Bitcoin Halving" and "Bitcoin Halvening." The question is, which one is more accurate, or are they both valid?
The term "halving" accurately describes the process of reducing the block reward by half every 210,000 blocks. It's a straightforward term that emphasizes the division of something into two equal parts, which aligns perfectly with Bitcoin's mechanism.
On the other hand, "halvening" is a verb that signifies making something or becoming half as much or as many. In this context, "Bitcoin Halvening" describes the action of halving the block reward, which is a precise depiction of the process.
Ultimately, whether you prefer "Bitcoin Halving" or "Bitcoin Halvening," both terms are correct and widely used in the cryptocurrency community. The choice comes down to personal preference.
Reflecting on the Last Bitcoin Halving
The most recent Bitcoin halving, which occurred on May 11, 2020, marked a pivotal moment in the cryptocurrency's history. This was the third halving since Bitcoin's inception, and it spurred a massive bull market for the entire crypto industry in 2021.
As with previous halvings, this event triggered considerable interest and speculation within the cryptocurrency market. This is when we saw meme coins and NFTs soar to unbelievable valuations. The space was gripped by a speculative frenzy which comes about every bull market.
Of course, it's crucial to emphasize that a halving is not a guaranteed catalyst for a price surge. Bitcoin's value is influenced by a multitude of factors, including market demand, investor sentiment, and technological developments.
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View PublicationsNonetheless, the Bitcoin halving remains a fundamental and intriguing aspect of the cryptocurrency's economic model, underscoring its unique value proposition and long-term potential.
I still believe that the trend is our friend and that we will see a new bull market for Bitcoin and other cryptocurrencies following the next halving event in 2024. Cycles repeat, and it’s important to note that Bitcoin, on average, hits its cycle lows 15 months before the next halving. In this last case, that occurred in Nov-Dec of 2022, when BTC bottomed out at $15,500.
Bitcoin also historically tops out 12-15 months after each halving. Therefore, if this cycle continues to play out, we will see Bitcoin hitting new all-time highs during the summer of 2025 if not earlier.
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Chris Curl
Editor, Daily Profit Cycle