Understanding the Recent Market Decline: The Pre-BTC Halving Effect🤯

The recent downturn in the cryptocurrency market may seem like a typical occurrence, often attributed to Bitcoin's failure to breach its resistance level. However, this assumption overlooks a crucial factor: the Pre-BTC Halving Effect.

Let's examine some key data:

1st Bitcoin Halving:

- Date: November 28, 2012

- Reward reduction: 50 BTC to 25 BTC

- Total Bitcoin supply: Approximately 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: Approximately 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: Approximately 18.375 million

- Price 1 day before: Around $8,600 per BTC

4th Bitcoin Halving (Estimated):

- Date: April 19, 2024

- Expected reward reduction: From 6.25 BTC to 3.125 BTC

- Estimated total Bitcoin supply: About 19.6875 million

- Price 1 day before: Prediction unavailable

Understanding How Bitcoin Functions:

Unlike current Ethereum-based coins, where developers mint coins as they wish and initiate airdrops, Bitcoin operates differently. BTC was designed so that acquisition requires mining. Even Bitcoin's founder mined coins and stored them in his wallet.

The mining process becomes increasingly complex as the number of blocks in the network grows. Essentially, miners are responsible for confirming all transactions. If you haven't yet read my post on Halving, I recommend doing so for a simplified explanation.

The Challenge:

The founder foresaw that as technology advanced, mining would become easier, leading to a surge in miners and subsequently, an exponential increase in market supply. To address this, a function was implemented to halve rewards over time. This ensures that the total supply would eventually decrease instead of increase, culminating in a maximum supply of 21 million Bitcoins over its lifetime.#binance #btc #bitcoin $BTC