Bitcoin (BTC): halving is less than a month away, what will change?

Bitcoin Halving
It’s the most closely watched event in the crypto ecosystem. The halving of Bitcoin (BTC) is fast approaching, and it’s generating its share of hopes and transformations. We take a look at what’s set to change in less than a month.

Halving Bitcoin: what will change ?

Bitcoin halving (BTC) is a regular event, taking place approximately every 4 years (every 210,000 blocks). It is an anti-inflationary mechanism, ensuring that mining rewards are periodically reduced. Inflation is controlled by the progressive reduction in the number of BTC produced.

Bitcoin’s next halving is less than a month away.

In concrete terms, this means that since 2020, miners have been earning 6.25 BTC per block mined, and these rewards will drop to 3.125 BTC per block mined within the next month. By 2028, these rewards will only amount to 1.5625 BTC.

Consequences for the Bitcoin price

Given the years of Bitcoin’s existence, we have a history that allows us to anticipate the most likely scenario for the cryptocurrency. Here’s what has happened in recent years when a halving has taken place:

1. The mining reward is divided by 2, inflation is halved;
2. Available supply is reduced, demand is growing;
3. With demand outstripping supply, the BTC price rises.

That’s the theory, because that’s what has happened historically with Bitcoin. Note that the only thing absolutely certain is that the available supply will be reduced. As for demand, which influences the Bitcoin price, things are less certain. BTC is of course affected by many factors, so a rise in its price is not guaranteed.

A highly optimistic ecosystem

That said, most commentators are optimistic. On the one hand, because this has always been the case, and on the other, because demand for BTC has risen sharply ahead of the halving. Needless to say, the world’s largest cryptocurrency has hit an all-time high in recent months, and the approval of spot Bitcoin ETFs has triggered an influx of institutional investors.

So will halving be a new trigger to continue the bull run ?

That’s the hope of many. In the meantime, miners are enjoying the last few weeks of high rewards: Bitcoin mining difficulty (BTC) reached an all-time high ten days ago.

Tell me what you think in the comments !

David Crypto

 

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