The recent fall in the cryptocurrency market cannot be called an ordinary fluctuation. It was influenced by a factor that is significantly different from previous events: the upcoming fourth bitcoin halving.
Let's look at the data of previous halvings:
1st bitcoin halving:
* Date: November 28, 2012
* Reward reduction: from 50 BTC to 25 BTC
* Total supply of bitcoins: about 10.5 million
* Price 1 day before: around $11 per BTC
2nd Bitcoin Halving:
* Date: July 9, 2016
* Reward reduction: from 25 BTC to 12.5 BTC
* Total supply of bitcoins: about 15.75 million
* Price 1 day before: around $657 USD per BTC
3rd Bitcoin Halving:
* Date: May 11, 2020
* Reward reduction: from 12.5 BTC to 6.25 BTC
* Total supply of bitcoins: about 18.375 million
* Price 1 day before: around $8,600 USD per BTC
4th bitcoin halving (approx):
* Date: April 19, 2024
* Reward Reduction: Expected from 6.25 BTC to 3.125 BTC
* Total supply of bitcoins (approx): about 19.6875 million
* Price 1 day before: Impossible to predict exactly.
Why does halving affect the course so much?
Unlike many other cryptocurrencies, the emission of Bitcoin is strictly limited. The maximum number of Bitcoins that will ever exist is 21 million. Halving halves mining rewards, leading to:
• Decrease in the growth rate of supply:
As time goes on, new bitcoins become fewer and fewer, making them more scarce.
• Increasing the complexity of mining:
Decreasing the reward makes mining less profitable, which can lead to a decrease in the network's hashrate.
In anticipation of the halving, investors often take the following actions:
• Accumulate bitcoins:
Investors buy and hold bitcoins in anticipation of an increase in the rate after the halving.
• Reduce risks:
Fearing volatility ahead of the halving, some investors are selling bitcoins to reduce exposure.
As a result, approaching halving can lead to:
• Rate growth:
An increase in demand and a shortage of supply can drive the price of Bitcoin.
• Increase in volatility:
Uncertainty about the future rate can lead to sharp fluctuations in the price.
It is important to remember that halving does not guarantee an increase in the exchange rate. It can be affected by other factors, such as:
• General state of the economy:
A recession or other economic upheavals can negatively affect the course of cryptocurrencies.
•Регулювання:
Government decisions regarding cryptocurrencies may affect their legality and availability, which may cause the exchange rate to change.
I hope this article was useful for you!
