If you're in the crypto space, you will know that something big is coming next year as the bitcoin halving will take place. Don't forget to follow me at #Ernestacademy to stay updated.
What's Bitcoin Halving?
Bitcoin halving refers to the reduction in the block reward given to miners for successfully validating and adding new blocks to the Bitcoin blockchain. The reward is halved, hence the name "bitcoin halving."
Purpose of bitcoin halving:
The primary goal of Bitcoin halving is to control the supply of new Bitcoins entering circulation and ensure the scarcity of the cryptocurrency over time.
Time for the next halving:
Bitcoin halving events occur once every 210,000 blocks are mined, roughly every four years. The initial block reward was 50 bitcoins and was halved to 25 in the first halving event in 2012, then halved again to 12.5 in the second halving event in 2016, and further halved to 6.25 in the third halving event in May 2020. The next halving is happening in 2024, and the reward will drop to 3.125.
Importance of Bitcoin Halving:
1. Scarcity and Inflation Control: By reducing the block reward and slowing down the rate of new Bitcoin creation, halving ensures that the total supply of Bitcoin approaches its predetermined cap of 21 million coins. Remember that scarcity increases demand, which in turn increases the monetary value of bitcoin.
2. Improves the security of the Bitcoin network: Bitcoin halving helps to improve the security of the Bitcoin network as it makes it more expensive for miners to attack the network.
3. Attracts new investors: Bitcoin halving attracts new investors to the Bitcoin market and the cryptocurrency market at large.
What crypto traders should expect next year:
We all know that bitcoin dominates over 40% of the entire cryptocurrency market capitalization; this means that any positive or bullish news about BTC will also affect the market positively.
Personally, I'm seeing a bullish run following the next bitcoin halving, and you have to position yourself now. Start accumulating good coins with strong fundamentals. Use dollar-cost averaging.
Do you agree with me? Leave a comment below.
