The #Bitcoin has just completed its 4th halving, so let me explain what that means in concrete terms and what it portends for the future since I haven't really talked about it since.
The halving is the event that involves halving the reward per mined block on the Bitcoin network, in other words, halving miners' pay while increasing the mining difficulty.
The reward was 6.25 BTC per block just an hour ago and will now be 3.125 BTC. You know a block is generated every 10 minutes, so per day we had 900 BTC distributed to miners, which creates a selling pressure of 58 million every day. From now on, this selling pressure drops to 29 million, significantly reducing inflation.
Mining difficulty increases, so miners will need to invest in more powerful machines to remain competitive. This will result in increased electricity and equipment costs, thus increasing the production cost of #BTC.
This halving will push the average production cost of a BTC to around $38k. Therefore, it is not in the miners' interest for the price to revisit these levels, otherwise they would mine at a loss and no merchant sells at a loss.
During the last halving, the price of BTC was at $8k, and 4 years later we're at $65k. The question is where will this price be at the next halving in 2028. I'll leave you with that thought...
