Bitcoin Halving 2024 - "Uptrend" will recur?

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2023-12-15

1. Overview of Bitcoin Halving

Bitcoin Halving 2024 is expected to take place in April 2024 and the phrase Bitcoin Halving has been mentioned with high frequency recently, as a milestone marking "uptrend", or a new super growth cycle of Bitcoin. Bitcoin in particular and the cryptocurrency market in general.

So what makes people so excited? This article will provide the meaning and opportunities that come with Bitcoin Halving 2024.

What is Bitcoin Halving?

Bitcoin Halving is an event that reduces the reward per block for Bitcoin miners by 50%, while these are the only people who create and put new Bitcoins into circulation. This mechanism is pre-programmed in the protocol, occurring every 4 years, with the purpose of reducing the number of new Bitcoins released to the market as well as reducing the inflation rate of Bitcoin.

Mining rewards decrease by 50% after each halving, expected to reach zero in 2150

Role of Bitcoin Halving

Satoshi Nakamoto - who is considered the "father" (or mother) of Bitcoin, did not give any special reason for the above formula. However, to briefly explain Bitcoin's halving mechanism, let's first understand why halving is needed.

Unlike currencies like the Dollar and Euro, Bitcoin is designed with a fixed supply of 21 million Bitcoins and a predictable inflation schedule. Bitcoin Halving ensures that the number of Bitcoins that can be mined is decreasing, while demand increases significantly, making Bitcoin even more scarce and increasing in value.

Mechanism of Bitcoin Halving

At the moment the only way to create new Bitcoins is to mine - which means mining participants must use equipment to compete in solving cryptographic equations and adding new blocks to the chain. Bitcoin blocks to receive rewards. The difficulty of Bitcoin mining will increase as more miners participate in the process.

In 2009, 50 Bitcoins were awarded to miners when they completed a block. After 3 halving periods, from 2020, the above number reduces to 6.25 Bitcoins per block. Bitcoin Halving is expected to end when the number of Bitcoins mined reaches 21 million around the year 2140.

Price impact history

Price history of Bitcoin with 3 Halving periods

With a fixed supply of 21 million Bitcoin, Bitcoin Halving will slow down the rate at which Bitcoin is brought to market and this will theoretically impact supply-demand forces and push Bitcoin up in price.

In fact, after each Bitcoin Halving period, Bitcoin's price line changes drastically and grows dozens, even hundreds of times since the previous lowest price. Let's look back at Bitcoin prices before and after each Bitcoin Halving period

First Halving - November 28, 2012

Per block reward reduced from 50 Bitcoins to 25 Bitcoins

Bitcoin price 12 months before Halving reached about 2 USD

The price at the time of Halving reached 12 USD and increased to 1163 USD at the peak of the cycle on November 29, 2013.

Second Halving - July 9, 2016

Block reward reduced from 25 Bitcoins to 12.5 Bitcoins

Bitcoin price 12 months before Halving reached about 270 USD

The price at the time of Halving reached 650 USD and reached the peak of the cycle at 19600 on December 17, 2017.

Third Having Period - May 11, 2020

Block reward reduced from 12.5 to 6.25 Bitcoins

Bitcoin price 12 months before Halving reached about 8500 USD

The price at the time of Halving reached 9700 USD and increased to 67500, reaching an All-time High, the highest price of all time.

It can be seen that after each Halving period, Bitcoin's price will begin a growth cycle and set a new peak price, leading to the growth of the entire cryptocurrency market.

2. Bitcoin Halving 2024 - The beginning of a super bull cycle

Time

The next halving, the fourth halving, is expected to take place in April 2024, when the number of blocks reaches 840,000. The block reward will decrease from 6.25 Bitcoin to 3.125 Bitcoin.

You can follow the countdown here

Market context

Bitcoin Halving 2024 takes place at a time when the cryptocurrency market has undergone significant changes compared to previous Halving periods.

First of all, we must talk about the development of the cryptocurrency market, which is now on a much larger scale than it was before. Many of the world's largest financial institutions have begun preparing to enter the market such as Blackrock, Fidelity, Ark Investment,...

In particular, in 2024, another event that will have a major impact on the cryptocurrency market will take place: the US Securities and Exchange Commission (SEC) will consider approving Bitcoin ETFs of investment funds before the Bitcoin Halving. take place. When Bitcoin ETF funds are approved, a large amount of money will flow into the market through US stock exchanges, increasing liquidity and creating positive conditions for the market.

Bitcoin ETFs are awaiting SEC approval

Comparing with Gold ETF, when the first Gold ETF was listed on November 15, 2004, the price of gold from 450 USD per ounce has experienced a steady growth until now. Of course, many other economic factors have affected gold prices, but the launch of ETFs is an important turning point in attracting investment capital from financial corporations into the market.

From there, we can expect a historical scenario to repeat itself for the price of Bitcoin - which is known as "digital gold".

Read more about Tether mint 4 billion USDT event in November

Evaluating the future after Halving

Financial institutions predict Bitcoin prices will have major growth in 2024.

Matrixport - the organization that accurately predicted that Bitcoin price will reach 45,000 by the end of 2023, predicts that bitcoin price will reach 63,000 USD in April 2024 and 125,000 USD by the end of 2024. Meanwhile, Standard Chartered also forecasts 100,000 price mark for Bitcoin in 2024.

Total cryptocurrency market capitalization has increased from 10 billion USD at the time of Halving 2016 to 800 billion USD at the end of 2017, similar to Halving 2020 when the market increased from 250 billion in May 2020 to nearly 2500 billion in May 2021.

All of the above data points in the same direction: Bitcoin in particular and the cryptocurrency market in general have a very high possibility of entering a super bull cycle in 2024. However, it should be noted that opportunities always comes with risks, so equip yourself with sufficient knowledge before entering the crypto market.

In the upcoming articles, VNST will continue to provide information about Bitcoin ETF, and opportunities for the digital currency market in 2024, please continue to follow.

3. Conclusion

Bitcoin Halving plays an essential role in the development of Bitcoin. The above article has provided concepts, roles and impacts as well as basic data for the 4th Halving period.

VNST, with the mission of providing safe, stable and convenient financial solutions for users, helping them easily participate in the financial technology market, will continue to contribute to the community to improve understanding of electricity money. electronics and blockchain technology.

Read more: 10 strategies to make money with Cryptocurrency 2024

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