The April 2024 Bitcoin halving was expected to increase the cryptocurrency’s value, as typically observed after such events. Bitcoin and other cryptocurrencies are known to be cyclical in nature. The halving occurs every four years, marking a 50% reduction in block rewards miners get.
Reduced incentive results in fewer coins produced and is usually associated with a brief surge in price caused by scarcity. Halving also reinforces Bitcoin’s monetary policy designed to limit the supply of coins to 21 million. Here’s a look at the effects of halving on the crypto market and what investors can anticipate:
Bitcoin Movement Post Halving
Investors were back accumulating Bitcoin throughout 2024 following a tough bear market in 2022. Their investments finally paid off in 2024 as Bitcoin blasted through the much anticipated $100,000 mark and has maintained high positions after that. The substantial gains were expected because of how prices have moved in the months following the halving year. Although surges usually take several months, the recent halving has already delivered significant price action and is expected to maintain the trend. The 2024 halving cut rewards for mining a block from 6.25 to 3.125 Bitcoins, further limiting the supply flow. Within the same year, prices surged culminating in prices breaking the $100,000 mark.
For new investors, it seems there’s little room for Bitcoin to grow beyond $100,000, but history and predictions suggest otherwise. The 2024 halving was the third year of the cycle, which historically delivers crypto’s strongest bull run. Bitcoin closed at around $64,000 on the night of the halving but has since grown more than 56% over the last eight months. Other factors, such as politics, economy, and inflation, also seem to be in favor of further price action. More countries are adopting Bitcoin, with some jurisdictions and organizations already recognizing it as legal tender. As Bitcoin becomes mainstream and scarce, its prices are bound to soar in the coming years.
Bitcoin’s Massive 2024
Since its launch in January 2009, Bitcoin has become the world’s most dominant cryptocurrency. Often referred to as digital gold, it is a pioneer in the cryptocurrency world. Prices have fluctuated through several rises and dips, but the overall trajectory has shown consistent growth. Bitcoin continues to gain value, supported by its adoption across various industries, from finance and healthcare to education and entertainment. Its versatility extends to online gaming and transactions, with some platforms, including sweeps casinos, offering exclusive Bitcoin games and bonuses. Players can also use BTC to purchase gold coins for wagers on slots, blackjacks, roulettes, poker, baccarat, and more, or redeem sweep coins for Bitcoin.
Gaming and online purchases aside, Bitcoin has made several strides in 2024, among them institutional adoptions driven by regulatory clarity, spot exchange-traded funds, and a global macroeconomic environment. Major economies continue to implement legal frameworks that will enable nationwide adoption, which helps to reduce the perceived risk for investors. The introduction of Spot Bitcoin ETFs also occurred in 2024, marking a watershed moment for adoption and exposure. Persistent inflation and geopolitical instability have also highlighted Bitcoin as a hedge against fiat currency devaluation.
Impact on the Mining Ecosystem
Bitcoin halving directly impacts the mining industry. Miners make money by facilitating Bitcoin transactions and authentications, which requires solving complex mathematical and cryptographic algorithms, equations, and problems. Solving problems in the Bitcoin ecosystem requires heavy computing power and miners are rewarded in BTC. When the reward is halved, the incentive for investing in mining infrastructure, which includes computers, buildings, air conditioning, equipment, labor, utilities, and permits, also drops. This leads to fewer coins produced and the scarcity increases demand and prices. However, some miners see an opportunity to operate more efficiently and invest in advanced hardware to remain profitable.
Naturally, less efficient miners are forced to exit the market after a halving event, causing a temporary drop in the Bitcoin hashrate. Usually, the hashrate rebounds as players refine and relaunch their operations. Access to cheap energy, cutting-edge technology, and favorable regulatory policies are also launching new hubs for mining throughout the world. The US, Canada, and Kazakhstan remain dominant but new hubs are opening in Africa and the Middle East. With 19.95 million of the 21 million bitcoins already in circulation, investors can expect mining to become less profitable. Many players are already pivoting to handling transactions and offering other services in the blockchain ecosystem.
A Look Into the Future of Bitcoin
After the 2020 halving, Bitcoin grew from approximately $8,000 to $28,000 in 12 months later. The crypto then had a bull run that saw it break into the $50,000 mark and similar patterns can be seen in the previous halving. If these trends are anything to go by, investors can expect more growth in the future. The impacts of the halving can be felt and the supply-demand dynamics are evident as shown by the significant price growth.
Analysts expect institutional participation to grow, which will enhance liquidity and provide stability. Blockchain technology has also emerged as a driving force for developing and integrating systems and applications used in various industries, increasing visibility and demand for cryptocurrencies. As BTC nears its cap supply and cryptocurrencies become more popular, prices are expected to soar, so investors have no reason to fear missing out.
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