It’s Bitcoin Halving Day today!
Today, Bitcoin is experiencing its fourth block reward halving, a pivotal event in its history. Each halving reduces the reward for mining new Bitcoin blocks by half, impacting the supply of this digital currency. This time, the reward increases from 6.25 BTC to 3.125 BTC per block.
Volatility before halving
Before BTCHalving2024, Bitcoin experienced ups and downs. Its price dropped to $59,685 but then rebounded above $65,000. Geopolitical tensions, such as the Israel-Iran situation, have added to this volatility, showing how global events affect the value of Bitcoin.
Unlike previous halvings which often resulted in large price increases, this one brought stability. Yet Bitcoin has continued to rise from $15,500 at the end of 2022 to a high of $73,680. Factors such as the approval of spot Bitcoin ETFs in the United States have fueled this rise.
Read more: Bitcoin ETFs See $55 Million Outflow: Market Correction or Sign of Trouble?
Analysts have mixed opinions…
Analysts have divergent views on the potential impact of the halving on Bitcoin’s price trajectory. While some expect a recovery after the halving, others, like JPMorgan, have warned that Bitcoin could see a decline due to its “overbought conditions.” The success of previous halving rounds was based on favorable macroeconomic conditions, according to Goldman Sachs.
What makes this halving different?
One thing that makes this halving unique is that Bitcoin’s hash rate, which is the amount of computing power used to operate and protect the network, will likely remain the same. In the past, when the hash rate was halved, there were short-term drops that were quickly followed by increases. This time, only small changes are expected. The approval of US Bitcoin ETFs has accelerated project development and corporate adoption, leading to higher demand for Bitcoin.
But there is still work to do to make Bitcoin less vulnerable to future geopolitical tensions, regulatory changes and technical flaws. Yet, it continues to attract investors from around the world, strengthening its role in the financial sector.
Read more: Bitcoin Price Rally Ahead: As Analysts Predict 15-20% Rise After Upside Breakout
What to expect Following?
Halving reduces the supply of new coins, making Bitcoin deflationary. Short-term traders might find this tricky since enthusiasm is already priced into the market. But Bitcoin’s long-term future depends on continued investment, not short-term ups and downs.