Why BTC and all other cryptocurrencies has fallen?
Well, you may think this was a usual fall as same happened recently when BTC failed to break its resistance point.
You are completely wrong! The reason behind the fall market is Pre BTC Halving Effect…
Let’s look at 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 know it’s confusing. Let me explain..
How Bitcoin actually works?
Well, Bitcoin haven’t started like current ETH based coins where the developers mint as many coin they want and start airdropping.
BTC was programmed in a way, that if you need BTC you must mine it. Even the founder of Bitcoin, he also mined Bitcoin and stored in his wallet.
The more the number of blocks in the network, the more complicated the mining process gets. Basically miners are behind all the transactions confirmation. If you haven’t read my post on Halving, I would suggest you to go and read all my post. I use most simple words to explain.
The issue is, the founder knew, as technology will evolve, mining will be easier. So more and more people will start mining Bitcoin, so market supply will be increasing dramatically.
So he decided to write a function that eventually reduces the rewards by half. So in feature, a point will came when the total supply will decrease instead of increasing. And the point is 21 million Bitcoin which will be the max supply of Bitcoin in lifetime.