Bitcoin reached a record high at the beginning of 2024. — AFP Relaxnews
Halving is an event that takes place every four years in the cryptocurrency world. It is followed particularly closely by the community, as it has the effect of boosting the Bitcoin price every time. The next halving event is due to take place in April 2024.
If you're a cryptocurrency owner, you've probably noticed that the value of Bitcoin has been rocketing since the start of the year, carrying almost all other virtual currencies with it. Bitcoin broke its all-time record in early March, before topping the US$73,000 mark on March 13, 2024. One of the reasons for Bitcoin's rise is the so-called halving effect.
Occurring every four years, this is a pivotal moment, during which the reward for miners of the famous cryptocurrency is systematically halved. This has the effect of mechanically slowing down the quantity of Bitcoin put into circulation. As a result, on or around April 19, 2024, the quantity of Bitcoins distributed per mined block will fall from 6.25 to just 3.125.
Note that it was decided to limit the total number of Bitcoins in circulation to 21 million, right from the outset, in 2009. It has been calculated that the very last Bitcoin will be mined in around 2140.
Historically, each halving event has been conducive to a sharp rise in the price of Bitcoin. So it's safe to assume that the upturn seen since January will last until at least April 19.
For miners to remain motivated despite the diminished rewards, the Bitcoin price must rise significantly. After the upturn, however, it's a different story, as the months following halving are often disappointing. The cryptocurrency market is particularly volatile, and after every record high, the Bitcoin price tends to plummet, sometimes brutally.
But this is not the only reason for Bitcoin's price rise. It is also being fueled by continuing high inflation around the world, and geopolitical instability in Europe and the Middle East. Against this backdrop, cryptocurrencies are more than ever viewed as a safe haven.
As such, Bitcoin could well reach new highs in 2028. – AFP Relaxnews
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