The Bitcoin halving has arrived, so what happens next for crypto's oldest coin?
Welcome to Bitcoin's fifth era.
A new era of digital scarcity has arrived as the network systematically reduces the number of newly issued Bitcoins.
Like clockwork on Friday, the rewards miners receive for validating Bitcoin transactions were cut in half for the fourth time since the blockchain launched.
Bitcoin's so-called halving occurred just after 8 PM ET on Friday. As a result, miners will earn 3.125 BTC for each block they create by sometime in 2028. It's a portion of the fee miners pay for solving cryptographic puzzles, helping to keep the Bitcoin network secure and will only halve again and again into the 22nd century.
Routine as they may be, Bitcoin's halvings are triggered by seven lines of code from Bitcoin's pseudonymous creator, Satoshi Nakamoto, and are core to the asset's quality.
As for Bitcoin's price, where it's headed next is anyone's guess. But historically, Bitcoin's price has gained positive momentum after each halving — though it's usually not immediately.
However, the changing macroeconomic landscape, prior knowledge of how the halving will occur, and Wall Street’s newly acquired investment tools make this moment in Bitcoin’s history unique.
Bitcoin’s “most explosive gains” typically occur 180 days after the halving. On average, Bitcoin prices rose 427% from 30 days before the halving to 180 days after the halving. Along these lines, Bitcoin jumped 116% in 2020 from $6,800 to $14,850, the blog post said.
Despite rising interest rates, Bitcoin hit an all-time high in March as Wall Street welcomed a spot Bitcoin ETF.
“The Fed is easing, and the main difference compared to the last halving (the 2020 halving) is the macro environment.”
As U.S. consumer prices soared in 2022, the Fed stepped in and raised interest rates at a breakneck pace to curb inflation. Monetary conditions are now relatively tight, and the market’s direction depends on expectations of when the Fed will cut rates and by how much.
"A lot of people are concerned that the (Federal Reserve) might cut rates less than three times this year,"This is bad for risk assets and may also be bad for Bitcoin."
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