The Bitcoin Halving Really Is Different This Time
It’s not often in crypto that you can say “this time is different” in good faith. But this time it really is different for Bitcoin’s halving, slated for next month. As Bitcoin historian Pete Rizzo noted recently, this is the first time bitcoin {{BTC}} has rallied before the programmatic slashing of block rewards — all three prior halvings (2020, 2016, 2012) preceded a major runup in crypto prices.
This column is part of CoinDesk’s “Future of Bitcoin” package published to coincide with the fourth Bitcoin “halving” in April 2024. It also published in The Node newsletter, a daily rundown of the most pivotal stories and why they matter. You can subscribe to get the full newsletter here.
No one can say for certain how the Bitcoin halving will affect the cryptocurrency’s price; we’re in uncharted territory in terms of technical analysis. Whether the halving accelerates bitcoin’s run-up or terminates it is historic, and a challenge to popular belief that crypto is locked into four-year market cycles of booms and busts anchored to these events.
However, there are a few other ways this Bitcoin halving, the fourth in the network’s lifetime, is already unprecedented.
Transaction fees
Not only is this the first halving when bitcoin’s price has climbed before the event, but it’s also the first time when transaction fees represent a significant portion of bitcoin miners’ revenues. Transaction fees are tied to network use, and ever since the launch of the Ordinals protocol — which enables users to “inscribe” arbitrary data on-chain to make NFT-like assets — network usage is way up.
See also: What the Bitcoin Halving Means for Miners and Prices | Opinion
While this doesn’t say anything about BTC’s price, it could impact how many and what kinds of mining equipment remain active following the halving. Typically the halving is like a wildfire that clears out outdated ASICs that are no longer profitable to run after the “block subsidy” is cut in half.
Most valuable block ever?
