Our Bitcoin halving countdown calculator indicates that the second halving of Bitcoin will occur in five days. But unless you've been following Bitcoin religiously since its inception, you may not know exactly what's going on.
At least one thing about this year's halving is different from prior ones: more people are talking about the quadrennial event. These are the things you should be aware of, without becoming too detailed.
The largest cryptocurrency, Bitcoin, experiences a halving every four years. The milestone is an essential component of the protocol's functionality and is built into the code.
Miners employ energy-intensive devices to mint new coins in order for Bitcoin to function. They are rewarded with Bitcoins for their labor of love, which is primarily done in massive data centers these days.
Currently, each new block that miners create earns them 6.25 BTC. (Blocks are sections of the blockchain with transaction information on them.) On Saturday, that will alter, and the prize will now only be worth 3.125 BTC.
why should I be interested?
It could seem overly technical, but it's important to take note of. The resource will grow increasingly rare, to start with. There won't be as many Bitcoins available on the market since miners will produce fewer coins. In addition, the largest and oldest digital coin's value will increase if past performance is any indication.
There is another way that this halving is different from the others as well: the Securities and Exchange Commission's approval of spot Bitcoin exchange-traded funds (ETFs) has attracted more sophisticated investors than in the past.
The approval of the new spot Bitcoin ETFs indicates that "more and more ETFs are allowed to hold 1-5% Bitcoin in their normal ETF offerings," according to Bob Bodily, CEO of the Bitcoin Ordinals marketplace Bioniq, who spoke with Decrypt.
He continued, "So ordinary investors should be paying attention because, whether they realize it or not, they will probably be holding Bitcoin pretty soon."
After prior halvings, the price of Bitcoin has consistently increased, albeit not usually right away. Prior to the initial 2012 halving, the price of Bitcoin was $12.35. After just a single year, the coin's value had increased by approximately 7,700% to $964.
It was time for the next event on July 9, 2016. By then, Bitcoin had fallen to $663, but a year later, it had risen to $2,500 once more.
At a price of $8,500 in May 2020, the cryptocurrency saw its most recent halving. During a bull run, the coin was pushing above $50,000 a year later.
Big "tradfi" names like AllianceBernstein have even stated that all the conditions are right for Bitcoin to reach $90,000 this year with this second halving.
More money is entering the market as a result of the approval of multiple spot Bitcoin exchange-traded funds (ETFs). Major asset managers such as BlackRock, in the meantime, provide products that make it simple for regular investors to have exposure to cryptocurrencies.
Not just miners are keeping an eye on this happening. For this reason, even inexperienced Bitcoin users should keep an eye on the halving in 2024.
