Raynor de Best
Content expert covering payments and (crypto)currencies
Bitcoin halving - statistics & facts
Crypto enthusiasts considered the Bitcoin halving of April 2024 one of the industry's biggest moments, but what does the halving actually mean, and is it a good or a bad thing? The halving is an event that occurs roughly once every four years - the most recent on April 19, 2024. It does two things. One, it releases 50 percent of the remaining number of bitcoins in circulation. Second, it decreases the reward of Bitcoin (BTC) mining by 50 percent. The previous halving in 2020, for instance, released 1,312,500 bitcoins to the public and decreased the block reward from 12.5 bitcoin to 6.25 bitcoin. The 2024 halving reduces this further, releasing half of the previous amount - 656,250 bitcoins - and slashing the previous rewards in half - to 3.125 BTC per block. This way, Bitcoin artificially ensures scarcity. Typically, the Bitcoin trading volume goes up significantly around the halving as investors are reminded that Bitcoin is capped at a maximum of 21 million bitcoins.
The Bitcoin halving is, therefore, not a new event. Nevertheless, the hype has been building up as 2024 progressed. What makes the fourth halving different from its three predecessors?
The Bitcoin halving is, therefore, not a new event. Nevertheless, the hype has been building up as 2024 progressed. What makes the fourth halving different from its three predecessors?
Bitcoin ETFs to push the buying process of Bitcoin
The approval of Bitcoin ETFs in the United States made it easier than ever for traditional investors to buy BTC. The largest Bitcoin ETFs in the world hold billions worth of Bitcoin assets. They especially impacted the cryptocurrency’s price - and overall Bitcoin investor sentiment, or NVT ratio - in January 2024: The Bitcoin price fell to below 40,000 U.S. dollars after the market corrected following a push from individual investors to buy bitcoins ahead of the ETF approval. The sheer number of investors involved - and that the top Bitcoin ETFs together hold more Bitcoin than the number that will be released new in April 2024 - may spark a sizable demand. This much anticipation could potentially lead to speculation and volatility in the short term.Bitcoin and macroeconomics: A hedge against inflation, or not?
The halving comes at a time when both inflation and interest across many countries are at an all-time high. Consequently, Bitcoin and its potential gains could, for some, be a far more alluring investment option than putting money in a bank or other traditional investment options. Its potential gains could be so high that it effectively protects from high interest rates becoming a safe haven from monetary policies and macroeconomics. Whether Bitcoin is such a hedge has been a topic of contention. Some investors and experts believe Bitcoin is not too different from gold, a commodity that is rare and has a limited supply. Other experts point to the price volatility inherent to Bitcoin, as opposed to the security and consistency of gold. The halving in April 2024 could potentially bring out this volatility even more, for better or worse.
