The Bitcoin (BTC) halving is the most highly anticipated event in the crypto industry. Unfortunately, not all members of the crypto community grasp its significance, thus, they’re not fully understanding its consequences. The itez editorial team decided to solve this issue by presenting a list of the top 12 facts in one review. Learn what crypto community members should know about Bitcoin halving 2024.
1. This is the fourth Bitcoin halving
Halving occurs in the BTC network every 210,000 mined blocks, roughly once every four years. The Bitcoin code contains a mechanism for self-maintaining mining difficulty. The more miners join the cryptocurrency network, the higher the difficulty. Therefore, the halving schedule remains approximately stable. Previous Bitcoin halvings took place in 2012, 2016, and 2020. The next one, if no significant changes in the operation of the cryptocurrency network happen, will occur in 2028.
Approximate Bitcoin halving schedule. Source: coinbeast
2. Block rewards will decrease from 6.25 BTC to 3.125 BTC
Each halving cuts the block reward by half. This will continue until miners earn the last token. After that, their profit will contain only transaction fees, extracted from users who need their operations conducted by someone.
3. BTC may face a post-halving sell-off
History shows that it is difficult for Bitcoin to continue its bull run right after a halving. One reason is the sell-off by miners—those market participants who, until recently, received twice as much. Their income is cut by 50%, while their electricity bills remain the same. Therefore, anticipating BTC growth, miners are forced to dip into savings and sell some of their hard-earned coins.
Interestingly, 10x Research estimates that miners will release $5 billion worth of BTC into the market after the halving. According to analysts, the sell-off is expected to last approximately six months.
4. Mining equipment is anticipated as well
Each piece of cryptocurrency mining equipment has its own set of limitations. Machines that were profitable before the halving may become unprofitable after the reward is reduced. That is why the market may see an influx of older miners being sold off. Market participants who are ready to mine coins with lower computational requirements can take advantage of these forced sales. On the contrary, manufacturers of new mining equipment may find a good reason to raise prices, as miners will be compelled to buy new machines, aiming to maintain their market share.
5. Bitcoin may reach ATH in autumn 2025
History shows that it typically takes about one and a half years for Bitcoin to reach an all-time high (ATH) in the cycle following a halving. If the cycle theory holds true, a new high could be expected in September or October 2025.
"Rainbow" chart of Bitcoin, which clearly shows the cyclical nature of cryptocurrency movements. The "body" of the rainbow indicates how expensive (red-orange area) or cheap (purple-blue area) the coin was at each time interval. Halvings are indicated by vertical lines, and the BTC price is represented by the black curve. Note that Bitcoin reached its maximum one and a half years after each of the previous halvings. Source: blockchaincenter
6. This is the first halving BTC approached with a renewed ATH
On March 11, 2024, Bitcoin set a new all-time high, surpassing the previous peak of nearly $69,000 reached on November 10, 2021. On that day, the cryptocurrency's price skyrocketed to $72,000. This marked the first time Bitcoin had reached an ATH before a halving event.
The positive dynamics of BTC at the beginning of the year were fueled by spot Bitcoin ETFs hype. Market participants had been awaiting the launch of the tool since 2013. The introduction of Bitcoin spot-ETFs in the US market democratised BTC earnings for institutional investors. This increased interest from market participants prompted issuers to accumulate substantial amounts of coins, thereby driving the cryptocurrency's price higher.
7. Only 1.3 million are left to mine
Miners have already extracted almost 19.7 million BTC from the total capped supply of 21 million. The chart below shows the speed of BTC mining (blue curve). Note how its curvature changes. The reason is the decrease in the mining rate due to halvings.
Comparison of Bitcoin price behaviour (black curve) and Bitcoin mining speed (blue curve, which shows the rate of the new coin’s inflow into the market). Source: blockchain
As the mining rate changes, the rate at which new coins enter circulation decreases. Therefore, it is likely that miners will be mining the remaining 1.3 million BTC over many decades. Presumably, they will not mine the last Bitcoin until 2140.
8. This is the first halving Bitcoin meets as the national currency of El Salvador
In September 2021, Salvadoran authorities took the groundbreaking step of making Bitcoin the world's first national cryptocurrency. This decision occurred a year and several months after the 2020 halving. Find out how the authorities came to this decision and what it meant for the country in our article.
9. Bitcoin meets the event among the top 10 most capitalised assets
With a capitalization of $1.2 trillion, Bitcoin ranks tenth in the overall ranking of the most capitalised assets, including precious metals and stocks. For comparison, the capitalization of gold, which holds the top spot, is $16 trillion.
Top 10 most capitalised assets. Source: companiesmarketcap
For a coin that has been predicted to die in the media almost 500 times, the tenth position in the ranking of the most capitalised assets seems like a good result.
Interesting! Popular analyst Willy Woo believes that Bitcoin will eventually surpass gold in terms of capitalization.
10. The growth cycle after the 2024 halving could be special
In the cycle after the 2024 halving, Bitcoin has "additional engines" that could accelerate the cryptocurrency's growth. These include investor interest in spot Bitcoin ETFs, expectations of the Fed moving to lower the key rate, and the likelihood of the US moving toward quantitative easing policies. We’ve already discussed how exactly these factors could accelerate BTC growth in our special article.
11. Bitcoin could multiply several times by the end of the year
The itez editorial team has compiled opinions from popular members of the crypto community in a single review. The discussion focuses on how high the 2024 halving could take BTC. Some experts anticipate growth reaching up to $300,000 by the end of this year.
12. The Bitcoin halving pushes the whole market to growth
Bitcoin is the flagship, accounting for over 50% of the market capitalization of digital assets. Therefore, other coins largely mirror BTC movements.
Historical trends indicate that alternative cryptocurrencies, or altcoins, also receive an impulse for growth amid the Bitcoin halving. The BTC capitalization decline can be considered a signal for the start of an “alt season”, because changes show a shift in investment flow from the flagship to other coins.
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This article is not an investment recommendation. The financial transactions mentioned in the article are not a guide to action. Itez is not responsible for possible risks. The user should independently conduct an analysis on the basis of which it will be possible to draw conclusions and make decisions about making any operations with cryptocurrency.
