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Bitcoin completes its fourth halving with doubts about the future evolution of the price

Date: July 23, 2024 Time: 02:00:07

Bitcoin has passed the ‘halving’, the process that the cryptocurrency goes through every four years and which involves reducing the reward for mining, with half doubts about the effect of this event on the price of the currency. The ‘halving’, which implies a reduction in the issuance of new currencies, has also put the focus on the future of ‘mining’.

The price of bitcoin has remained stable after finishing the ‘halving’ in the early hours of this Saturday, without major variations and close to $64,000. This figure is far from the maximum level reached by the cryptocurrency on March 14, when it registered a price of $73,798.

Analysts predict a price reversal thanks to the fourth halving in the history of bitcoin. Even so, experts warn that the effects will take a few months to be perceived and add that it is possible that the currency will go through a period of short-term volatility.

“Historically, bitcoin has experienced notable price increases in the six months following each ‘halving’,” says Javier García de la Torre, director of the Binance platform for Spain and Portugal, in a report in which he analyzes this event.

According to García de la Torre, “although past performance does not indicate future results, these trends provide insights into the potential impact” of halvings. However, he specifies that the evolution of bitcoin will also depend on “general market sentiment” and other factors.

In this sense, the head of Binance highlights the decision of the SEC, the US supervisor, to authorize the creation of exchange-traded funds (ETF) linked to the spot price of bitcoin, a measure that “has increased demand” and “has helped expand the reach” of this cryptocurrency.

The SEC’s decision has made it easier for institutional investors to enter the market, which has led bitcoin to reach all-time highs. The ‘halving’ has meant cutting in half the reward that ‘miners’ receive for validating transactions.

Unlike what happens with currencies issued by central banks, the creation of bitcoins is carried out in a decentralized manner through a process known as ‘mining’. The ‘miners’ receive a number of bitcoins for each block of transactions they validate.

After this ‘halving’, the reward for ‘miners’ has gone from 6.25 bitcoins for each block mined to 3,125 bitcoins. In this way, the creation of new currencies is reduced from 900 bitcoins per day to 450. Halvings occur every time 210,000 transaction blocks are mined, which usually occurs every four years. In the history of bitcoin, four ‘halvings’ have already been recorded, in 2012, 2016, 2020 and, now, in 2024.

Bitcoins will continue to be issued until there are 21 million coins in circulation. Currently, 19.6 million have already been issued. Another aspect to take into account is the impact of the ‘halving’ on the ‘mining’ activity, key to validating transactions. The ‘miners’ will, in principle, be the most affected, because their reward in bitcoins has been reduced. However, this cut could be offset by the probable revaluation of the cryptocurrency.

* This website provides news content gathered from various internet sources. It is crucial to understand that we are not responsible for the accuracy, completeness, or reliability of the information presented Read More

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.

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