The cryptocurrency community is gearing up for the approaching Bitcoin halving event, where the Bitcoin rewards will be reduced by half, as the name implies.
The specific date of the halving event is not fixed on the calendar but typically occurs roughly once every four years. Current projections indicate that the next halving is expected to occur sometime late Friday or early Saturday.
What is Bitcoin halving? Bitcoin rewards for miners are halved every four years. Miners, who are responsible for solving intricate cryptographic puzzles to generate a new blockchain within the network, receive rewards in the form of Bitcoins for their efforts.
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Satoshi Nakamoto, the creator of Bitcoin, programmed the system in such a way that after every 210,000 blocks mined, the rewards granted to miners are halved, occurring approximately every four years. This upcoming halving event marks the fourth occurrence. The initial halving in 2012 decreased the reward value from USD 50 to USD 25. The latest halving will further reduce the reward to USD 3.125, which, at the current valuation, is close to USD 200,000. As of April 16, the price of Bitcoin was at USD 63,000. The halving process will continue until 2041, by which time all Bitcoins will have been mined. However, this particular Bitcoin halving event is anticipated to be distinct from its predecessors due to recent geopolitical tensions between Iran and Israel that have caused market instability. Bitcoin witnessed a significant drop, hitting its lowest point in a month. On Friday, during the Asia session, Bitcoin experienced a decline of more than 5.5%, dropping to $59,961. Analysts weigh in on the potential impact of the halving on Bitcoin’s price
Manhar Garegrat, Country Head India & Global Partnerships at Liminal Custody Solutions – The reduction in Bitcoin rewards could potentially affect the price of Bitcoin by increasing its scarcity, leading to upward price pressure and attracting new investors to the cryptocurrency market.
In addition to the potential effects on alternative cryptocurrencies, it is worth considering the potential introduction of new products into the cryptocurrency market. Just as spot ETFs are being introduced globally, innovative financial instruments may emerge in response to the dynamics surrounding the Bitcoin halving, providing investors with alternative avenues to engage with digital assets.
Shivam Thakral, CEO of BuyUcoin – Bitcoin’s price might witness short-term corrections or dips following a halving, but historical data suggests that the event could trigger significant changes in the cryptocurrency market, potentially resulting in a new all-time high in the coming months.
Jyotsna Hirdyani, South Asia Head at Bitget – Historical trends indicate that post-halving periods are characterized by notable market fluctuations, often leading to new all-time highs for Bitcoin. With the recent approval of ETFs in the US and now in Hong Kong, there has been a steady inflow of funds propelling Bitcoin prices to successive new highs. However, there is some short-term uncertainty in the broader macroeconomic landscape.
It is crucial to acknowledge the possibility of a pullback in Bitcoin prices due to macroeconomic uncertainties despite positive market sentiments. If historical patterns in the cryptocurrency space persist, we could anticipate Bitcoin reaching new all-time highs of $100,000 and beyond within the next 10-18 months.
Jithin Mohandas, Research Analyst, Mudrex – Presently, Bitcoin is displaying signs of a pre-halving retracement, characterized by bearish indicators and sideways market movements. A technical analysis of the weekly timeframe reveals the formation of a Cup and Handle pattern in Bitcoin’s price chart. Traditionally, this pattern may precede further downward movements. Notably, there is strong support in the price range of \(60,000 to \)61,000. If this support level is breached, there is a possibility of a retreat towards the \(51,000 mark. In a worst-case scenario, prices could potentially drop to around \)45,000, signaling a temporary bearish market phase.
Rajagopal Menon, Vice President, WazirX – The prevailing consensus suggests that prices are likely to rise due to the supply shock resulting from the halving event. However, geopolitical events such as recent threats could potentially lead to market downturns, as witnessed over the weekend.
(Disclaimer: The recommendations, opinions, and views expressed by the experts are their own and do not necessarily reflect those of The Economic Times)