Halving (from English "halving" — a reduction by half) is a process whereby the reward for mining a new block in the Bitcoin network is reduced by exactly half. This mechanism is built into the cryptocurrency's protocol to control inflation and limit the total number of bitcoins to 21 million coins.
✓ Since the creation of Bitcoin in 2009, halving has occurred every four years.
When was the last and next halving?
1. The last halving took place on April 12, 2024. At that time, the block reward decreased from 6.25 to 3.125 BTC (Bitcoin).
2. The next halving is expected in 2028. The block reward will decrease again, now to 1.5625 BTC.
⚠️ How did the market behave before and after halving?
History shows that halving is an important event that can significantly impact the price of Bitcoin, but not immediately:
• 2012 (1st halving): After the halving, the price of Bitcoin began to rise only after several months, reaching an all-time high in 2013.
• 2016 (2nd halving): A similar situation: after a period of accumulation, growth began, and the peak price occurred at the end of 2017.
• 2020 (3rd halving): Again, the price did not rise immediately, but by 2021 Bitcoin reached a record price of around $69,000.
🤔 Why is the end of 2024 so important?
If we look at past cycles, the halving of 2024, which occurred in spring, may trigger a new accumulation period, followed by growth. However, this process takes time. Typically, the market starts to move actively 6–12 months after halving, which may coincide with the end of 2024 or the beginning of 2025.
⚠️ What is important for beginners and experienced traders to know?
• For beginners: Do not expect immediate price increases right after halving. This is a long-term event that affects the supply of bitcoins but does not immediately lead to increased demand.
• For experienced traders: Halving often becomes a catalyst for a "bull market" (a period of rising prices). However, one cannot rule out intermediate corrections and a prolonged period of consolidation (price stability within a narrow range).
🧐 Key terms that are important to know:
1. Blockchain — a chain of blocks where all transactions are recorded.
2. Block reward — the amount of bitcoins that a miner receives for adding a new block to the network.
3. Inflation — the decrease in the purchasing power of a currency due to an increase in its quantity.
4. Consolidation — a market stage where the price moves within a narrow range, showing neither growth nor decline.
5. Bull market — a period of sustained price growth.
6. Bear market — the opposite of a bull market, when prices fall.
Why is this important for the cryptocurrency community?
Halving is a unique feature of Bitcoin that makes it a scarcer asset. Each new halving reduces the number of bitcoins that enter circulation, potentially making them more valuable.
Whether you already have bitcoins or are just planning to acquire them, understanding market cycles and events like halving will help you make more informed investment decisions. 😊