Mid-May 2023 marked another milestone for Bitcoin. A Tweet from Bitcoin Woods noted there were less than 50,000 blocks until the next bitcoin halving event, with the event tentatively expected to take place on April 22nd, 2024.
What Is Bitcoin Halving?
It occurs each time another 210,000 blocks are added to the blockchain, which historically has taken place about every four years. Notably, each halving cuts the reward to miners by 50%, intending to reduce the number of new Bitcoin entering the market.
Sometime in April 2024, miners will receive 3.125 Bitcoin, down from the current 6.25 Bitcoin for each successful block mined.
Historically, halving events have had a notable impact on the cryptocurrency. Aside from increased press coverage and general fascination with the digital asset, halvings have also increased Bitcoin’s price.
Understanding Bitcoin's Price Increase-Post Halving
For example, after the first halving in November 2012, Bitcoin’s price from halving to post-halving top (January 2014), jumped by 7,997%. The second halving in July 2016 resulted in a 2,946% increase from the halving date to a post-halving top in December 2017.
The timeline from the coin’s third halving in May 2020 to the November 2022 post-halving top, left holders enjoying a 607% increase in the asset’s price.
CryptoCompare analyst Jamie Sly noted in April 2023 that investors often accumulate Bitcoin in a halving run-up, with “the accumulation period from the market bottom after the breakout to the halving date has historically spanned at least 500 days.”
The stock-to-flow model, which has attracted immense criticism for its failure to predict Bitcoin’s 2022 price, has again attracted bulls’ attention as the next halving event looms. In April, the model’s creator argued that Bitcoin would trade around $60,000 around the fourth halving and continue rising after the event.
Bitcoin's Deflationary Nature Helps Drive The Price Up
Why do halving events traditionally lead to a boost in Bitcoin’s price? Many argue that each halving underscores Bitcoin’s benefits as a deflationary asset in an era where many traditional central banks print money recklessly.
Naturally, Bitcoin demand also rises after each halving due to increased attention on the coin coupled with a reduced supply of new Bitcoin.
The number of miners typically decreases after each halving event as enthusiasts move to other digital assets to make more money or stop mining altogether. This trend is why miners are always searching for ways to generate more hashes per second while consuming less energy.
While any crypto user knows past performance does not always equal or suggest the same results in the future, trends point towards the possibility of Bitcoin’s next halving being a catalyst for the coin and the broader crypto industry.
Are Ready To Join The Cryptocurrency Revolution?
If you’re looking to buy Bitcoin as the next halving approaches, store your digital assets in a secure, non-custodial wallet like ByteFederal’s ByteWallet.
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Learn more about how to download the ByteWallet for free and start buying Bitcoin before the next event.