One of the most anticipated events in the history of digital assets (Bitcoin Halving) is just one year away, however, crypto traders, investors, and analysts have started anticipating how it could impact the cryptocurrency market.
What is Bitcoin Halving?
Bitcoin halving otherwise known as halving is a notable event that happens every 210k blocks, the last time it happened was in 2022, and prior to the last halving, it has only happened three times.
Bitcoin halving simply means the supply of new Bitcoin, as well as the reward for miners is reduced by half, every halving reduces the inflation rate which in turn, leads to a spike in Bitcoin price.
During the last halving in 2022, miners that participated in Bitcoin’s blockchain network as transaction processors and validators got 6.25 Bitcoins per block.
The next and anticipated halving will happen in 2024, and by then, each block reward will drop by half of the initial reward, so miners in the next Bitcoin halving will get 3.125 Bitcoins per block mined.
As the mining continues, the reward continues to drop until it gets to zero.
Past Bitcoin Price Performance During BTC Halving
Most of the time, when the halving event is about to occur, people look at the historical prices of Bitcoin to sometimes determine the likely performance of Bitcoin when the next halving happens.
However, it is noteworthy that the past history of the market during the halving event does not necessarily determine what will happen next, this is because apart from halving, there are various factors that contribute to market behavior generally, factors such as sentiment, regulatory developments, and macroeconomic trends amongst others can determine the behavior of the market.
However in 2012, when Bitcoin halving happened, there was a spike in the price of Bitcoin from $11 to roughly $1,100, this happened between November 2012 and November 2013. Fast forward to 2016 halving, there was a rise in Bitcoin price from about $650 in July 2016 to $20,000 in December of the succeeding year.
Back in 2020, Bitcoin’s price rose from $9, 000 to its historical all-time high of $69,000, this happened between May 2020 and November of the succeeding year.
However, it is important to know that in addition to the halving event, there are several factors that contributed to the behavior of markets during those periods, events such as the Covid-19 pandemic, the growing interest of institutional investors in digital assets, and maturity of regulation, amongst others are what contributed to the performance of the market during those periods.
However, analysts have commented on what is likely to be the fate of the market in the next halving. According to them, there will be a notable change in the price of Bitcoin, this is because the case has been like that in the past Bitcoin halvings, although, many opined that different factors might as well determine the fate of the market.
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