🪙 Halving is an event in the cryptocurrency world that happens approximately every four years. It mainly concerns Bitcoin (BTC), but can also apply to other cryptocurrencies. Miners receive fewer new bitcoins for each block they verify. This measure is built into the Bitcoin code to control inflation and ensure the scarcity of the cryptocurrency. Let's look at what it is and why it matters:
1. Limited Supply: Halving helps limit the amount of new bitcoins entering the market, which maintains their value.
2. Inflation: As the reward decreases, Bitcoin's inflation rate decreases, theoretically making it more valuable in the long run.
⛏️Let's delve into the history of halving⛏️
- First Halving (2012): The block reward decreased from 50 to 25 BTC. The price at that time was about $12, and a year after the halving it rose to $1,000.
- Second Halving (2016): The block reward decreased from 25 to 12.5 BTC. The price at the time of the halving was about $650, and a year after the halving it rose to $2,500.
- Third Halving (2020): The block reward decreased from 12.5 to 6.25 BTC. The price at the time of the halving was about $8,500, and a year after the halving, it rose to more than $60,000.
- Fourth Halving (2024): April 20, 2024. The reward for mining new blocks decreased from 6.25 to 3.125 BTC. ‼️I have already analyzed the expectations and prospects in another post, namely on tarot cards😁‼️
💡Historically, after each halving, there is a significant increase in the price of Bitcoin.
1. First halving (2012): Growth of about 8.233%
2. Second halving (2016): Growth of about 285%
3. Third halving (2020): Growth of about 605%
💡This is due to a decrease in supply and an increase in demand. However, past results do not guarantee future ones, and the market may behave unpredictably.
I hope this explanation helps you better understand what halving is and why it is so important!