You may have heard about the Bitcoin halving which is expected to take place on April 20th, 2024 but what exactly is it?
In a very simplified description of the Bitcoin network, transactions are run on specialized computers around the world that solve complex mathematical problems and verify transactions. One block of transactions is mined every 10 minutes and each block rewards 6.25 BTC as of today. On April 20th, this rate will be cut in half to 3.125 bitcoins for every block.
This halving of the amount of mining rewards is schedule after every 210,000 blocks, or four years. This halving cycle will be repeated for the next 116 years. By 2140, the total amount of bitcoin ever mined will finally reach 21 million. The sudden decrease in the amount of supply caused by the halving historically has coincided with a large price increase for BTC that lasts for about a year, followed by a crash.
Important Note: Past performance does not guarantee future results.
However, the Bitcoin market history is the best window for what to expect in the future. Take a look at the timeline below for the Bitcoin Halving price, the price 6 months later, the cycle high price, and the cycle low price.
In Bitcoins history, it has never gone below the halving price, or even the price six months after the halving. Personally, I’m in Bitcoin for the long-term and I’m not concerned with the cycle high price. I’m worried about the following low. Bitcoin may feel expensive at prices higher than $70,000, but how much more expensive will it be six months from now?
This cycle is different as the current price of BTC is listed at $71,512 which is higher the previous cycle high reached on November 10, 2021, at $68,789.
How high will this cycle go? I’m not sure, but I doubt it will crash lower than the price that is set on halving day. With that said, happy 4/20 everyone.
Rick
Comments