Why $BTC and other cryptocurrencies have fallen...!❗❗❗
You might think this was a usual decline, as happened recently when BTC failed to break its resistance point. However, the reason behind the market fall is the Pre BTC Halving Effect.
Let’s review some data:
1st Bitcoin Halving:
Date: November 28, 2012
Reward reduction: 50 BTC to 25 BTC
Total Bitcoin supply: About 10.5 million
Price 1 day before: Around $11 per BTC
2nd Bitcoin Halving:
Date: July 9, 2016
Reward reduction: 25 BTC to 12.5 BTC
Total Bitcoin supply: About 15.75 million
Price 1 day before: Around $657 per BTC
3rd Bitcoin Halving:
Date: May 11, 2020
Reward reduction: 12.5 BTC to 6.25 BTC
Total Bitcoin supply: About 18.375 million
Price 1 day before: Around $8,600 per BTC
4th Bitcoin Halving (Estimated):
Date: April 19, 2024
Reward reduction: Expected from 6.25 BTC to 3.125 BTC
Total Bitcoin supply (Estimated): About 19.6875 million
Price 1 day before: Cannot be accurately predicted.
I understand it might be confusing. Let me explain...
How Bitcoin actually works:
Bitcoin didn't start like current ETH-based coins where developers mint as many coins as they want and start airdropping. BTC was programmed so that to obtain BTC, you must mine it. Even the founder of Bitcoin mined Bitcoin and stored it in his wallet.
The more blocks in the network, the more complicated the mining process becomes. Miners are behind all transaction confirmations. If you haven’t read my post on Halving, I suggest you go and read it. I use simple words to explain.
The issue is, the founder knew that as technology would evolve, mining would become easier. So more people would start mining Bitcoin, dramatically increasing market supply. Therefore, he decided to write a function that eventually halves the rewards. Eventually, there will be a point when the total supply decreases instead of increasing. This point is 21 million Bitcoin, which will be the max supply of Bitcoin in its lifetime.
