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Bitcoin Completes Fourth Halving! So, What's Next?

In the past, post-Bitcoin halving, the market underwent a phase of increased volatility and price discovery. And these post-halving periods have witnessed significant market fluctuations, with Bitcoin often achieving new ATHs.

  • Bitcoin has completed its fourth halving event, reducing miner rewards to 3.125 BTC per block after mining its 840,000th block.
  • ViaBTC mined the most expensive Bitcoin block ever during this halving, earning approximately $2.6 million from 37.67 BTC in transaction fees and rewards combined.
  • Despite past trends suggesting post-halving price increases, major financial institutions like JPMorgan and Deutsche Bank predict a more subdued market response this time around.

Finally, Bitcoin has successfully gone through its fourth-ever halving event after posting its 840,000th block, the point at which mining rewards are slashed in half, once again. 

Additionally, at 12:09 am UTC on April 20, when the mining company ViaBTC successfully mined block number 840,000, it quickly became the most costly block ever mined in Bitcoin's history. 

According to a report, users spent a total of 37.67 BTC in transaction fees, and including the mining rewards, ViaBTC earned a total of 40.7 BTC — approximately $2.6 million — for this significant block.

For those who are unaware of this crucial event, Bitcoin halving is a programmed event that occurs every 210,000 blocks, or roughly every four years, to reduce the rate at which new bitcoins are created. 

This halving process is designed to control inflation and extend the distribution of new bitcoins until around the year 2140. During each halving, the rewards that miners receive for verifying and adding new blocks to the blockchain are cut in half. 

For instance, when Bitcoin first started, miners received 50 bitcoins per block. After the first halving in 2012, this reward dropped to 25 bitcoins. The subsequent halvings occurred in 2016 and 2020, with the rewards dropping to 12.5 and then 6.25 bitcoins, respectively. And after this year’s halving event, to be specific, from today onwards, Bitcoin miners will receive 3.125 BTC per mined block.

This mechanism ensures a slower and more controlled release of new bitcoins and underpins the cryptocurrency's value over time by limiting supply. 

Now that the halving has already taken place, what should people, like you and I, expect from the market? 

In the past, after a Bitcoin halving, we have seen the cryptocurrency market undergoing a phase of increased volatility and price discovery. And these periods, post-halving, have witnessed significant market fluctuations, with Bitcoin often achieving new all-time highs (ATH). 

Additionally, the market's robustness and rising interest from institutional investors have sparked optimism among investors, prompting many to speculate about Bitcoin's potential to attain previously unseen price levels. 

In January, we witnessed the approval of multiple spot Bitcoin ETFs in the U.S., and more recently, Hong Kong has approved several spot Bitcoin ETFs. And not to mention, Bitcoin even soared to an unprecedented high of more than $72K in March this year.

Now, many in the community are looking forward to a significant spike in Bitcoin prices. However, a certain group of analysts and even institutions believe otherwise. For instance, the investment banking giant JPMorgan believes that there will be some downside to Bitcoin post-halving, and Deutsche Bank has said it does not expect prices to increase significantly.

Crypto analyst and Bitcoin Magazine editor, Rizzo, on the other hand, seems to be optimistic. He points to a notable trend where Bitcoin typically gains a zero in value after each halving, indicating substantial growth.

Furthermore, in a recent post, Bitwise CEO Hunter Horsley voiced his conviction that are dramatically underestimating the halving. He argues that the market has never fully priced in the effect of previous halvings, and this trend has persisted. To support his claim, Horsley cited historical data from the past three Bitcoin halvings.

“The impact of the halving isn't based on the views of fully deployed existing holders. It's a function of if there will be meaningful consistent new demand, alongside the reduction in the daily availability of natural sellers. From my seat, I see consistent new demand ahead in 2024 and the setup for an impactful halving,” wrote Horsley on X.

This particular Bitcoin halving has been perceived as somewhat different from previous ones, especially since it has already achieved an all-time high (ATH) even before the halving event. Additionally, despite any market movements, predicting Bitcoin prices has always been a challenge.

Thus, the best approach is to stay informed about market trends and see where they lead.

Edited by Harshajit Sarmah