The next Bitcoin halving will take place in less than a year. If history repeats itself, we are at the dawn of a new ATH.
bitcoin halving
One of the most important events for Bitcoin is the “halving” which means the halving of the reward gleaned by miners. Since 2023, the latter receive 6.25 bitcoins for each block.
This reward is actually distributed in proportion to the power provided by the miners grouped together in pools. It is these pools that build the blocks and are therefore responsible for selecting the transactions.
By the way, there is a risk that these pools, which are few in number, censor certain transactions. If this subject interests you, do not miss these two articles:
- Bitcoin Mining – How does it really work?
- Stratum V2 – Bitcoin miners take back power
The next halving is expected to take place in April or May 2024. This will depend on how the number of miners evolves by then. A steady increase in hashrate will speed things up.
Indeed, the halving takes place every 210,000 blocks, or approximately every four years. We’re at block 786,820, do the math. The reward for each block will drop to 3.125 BTC in a year.
This system causes the last Bitcoin to be mined around the year 2140 and 92% of BTC has already been mined.
What will be the impact of the halving on the value of Bitcoin?
The value of everything depends on supply and demand. If supply falls, all other things being equal, bitcoin will mechanically appreciate.
However, it should be noted that the impact of the halving drops by half each time. Decreasing the block reward (the supply) from 50 BTC to 25 BTC impacts the supply more than a decrease from 25 BTC to 12.5 BTC. However, this impact remains the same if demand doubles in the meantime.
That said, the most important factor to consider is bitcoin’s market capitalization. The bigger it is, the harder it is to move the market.
Indeed, if bitcoin is worth a billion, it only takes another billion to cause a 100% appreciation. If bitcoin is worth 500 billion, it will take roughly another 500 billion to garner another 100% appreciation.
In other words, the more bitcoin appreciates, the more its appreciation will slow down. This is a phenomenon that can be easily observed with the following graph:
The next halving will take place in ~12 months”
With each cycle (halving), the bullish effect moderates. This can also be seen very well in terms of annual performance:
2010: +9900%
2011: +1471%
2012: +187%
2013: +5286%
2014: -56%
2015: +34.5%
2016: +123%
2017: +1368%
2018: -73%
2019: +92%
2020: +303%
2021: +60%
2022: -64%
2023: +70% so far
More bitcoins
The halving is very important, but the arrival of new investors is just as important. Past performance may be repeated if the number of bitcoiners grows as fast as the market capitalization of bitcoin.
Hoarding is also crucial. Good news, the number of BTC that has not changed hands for more than two years is at an all-time high. 53% BTC to be precise.
Another thing that has changed lately: the evolution of the number of BTC on the exchanges. This is the first time that we have seen such massive withdrawals. The following graph shows that after a peak at 17%, only 12% of BTC would still be on the exchanges.
This time will be different. »
This dynamic is a good omen. It means fewer and fewer people are wasting their time playing at Binance Casino. The purge of the shitcoinery (Terra Luna, Celius, FTX, etc) has put the church back in the center of the village.
Bitcoin is finally seen as a long-term savings tool. As a store of value that, having been correlated to NASDAQ, is now correlated to gold.
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