Previous halvings have generated large long-term gains, but analysts caution that this does not automatically mean the same thing will happen this time.
By Dan Cairns, journalist
Saturday April 20, 2024 3:45 a.m., United Kingdom
The rare Bitcoin halving event has occurred, according to crypto analytics firm CoinGecko.
This significantly reduces the number of new Bitcoin enter the market by reducing the rewards earned by Bitcoin miners by 50%.
Taking place approximately every four years, it is designed to cap supply at 21 million by 2140.
This means that only 450 Bitcoins will now be created each day.
Halvings also occurred in 2012, 2016 and 2020 – and the mechanism was written into Bitcoin’s code when it was initially created.
The price of the cryptocurrency remained stable at $63,747 (£51,531) after the halving, with analysts saying the expected event had already been priced into the price.
Investors will be hoping, however, that a big increase isn’t too far away, after previous halvings finally led to significant gains.
The price during the May 2020 halving was around $8,600, but a year later it jumped to over $56,000.
Andrew O’Neill, a crypto expert at S&P Global, said he was “somewhat skeptical about what lessons can be learned in terms of price prediction from previous halvings.”
“It’s just one of a multitude of factors that can determine prices,” Mr O’Neill said.
Bitcoin hit a new high of $73,803 (£59,661) in March after increasing 175% over the previous 12 months.
Its legitimacy was also boosted in January when funds (ETFs) holding Bitcoin were allowed to trade on the US stock exchange.
Learn more:
Why Bitcoin has suffered a sharp decline from record highs
A computer scientist is not a mysterious inventor of Bitcoin, judges the rules
The mainstream financial industry has traditionally viewed Bitcoin as extremely risky and subject to unpredictable and dramatic price fluctuations.
Bank of England Governor Andrew Bailey warned in 2021 that cryptocurrencies have “no intrinsic value” and investors must be “prepared to lose all their money.”
He also told MPs in January that crypto was “pretty inefficient” and “still not taking off as a core financial service”.
Over 19.5 million Bitcoins have now been mined, leaving only 1.5 million Bitcoins likely to be mined over the next 116 years.
The halving occurs every 210,000 “blocks”, which normally corresponds to approximately every four years.