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Does halving of Bitcoin affect its Price?

New Bitcoins that was created through Halving that happened on 19th of April 2024 was dropped in issuance rate by 3.125 roughly every ten minutes.
Bitcoin Halving

The long-waited Bitcoin Halving happened on Friday 19, April 2024 at a little after 8:09 p.m. Eastern time, making it the fourth Bitcoin Halving that has ever occurred since Bitcoin was incepted by creator Satoshi Nakamoto in 2009.

When the halving happened, new Bitcoin that was created dropped in issuance rate by 3.125 roughly every ten minutes, making it uncertain if this will result in a significant surge in Bitcoin prices, as it has historically.

After the halving events in 2012, 2016, and 2020, Bitcoin saw price surges of roughly 93 times, 30 times, and 8 times, respectively, from the halving day to the cycle's peak. Although, price is expected to rise as long as demand either stays the same or grows faster than supply because the halving of bitcoin will limit output.

However, following Friday's halving, the rate of new Bitcoin created approximately every 10 minutes stands at 3.125. These halving occurrences happened after every validation of 210,000 blocks, occurring roughly every four years, and were integrated the into Bitcoin’s code since its inception in January 2009.

After the halving, the reward for miners who validate new blocks on the Bitcoin network is cut in half. This reward, called the block subsidy, is the new Bitcoin created and given to the miner. Now, successful miners get 3.125 Bitcoin as subsidy. Apart from this subsidy, miners also get fees from the transactions in the block.

The 840,000th block on the Bitcoin network, which was mined by ViaBTC, marked the halving. Interestingly, the miner received more than 40 Bitcoin, equivalent to over $2.6 million, from both subsidy and fees.

This is much higher than the roughly 7 Bitcoin, worth a little over $450,000, earned from fees in the blocks before the halving. It's unclear why the fees spiked, but perhaps people were willing to pay more to ensure their transactions were included in the halving block, which had 3,050 transactions.

Bitcoin Halving Price

In the past, Bitcoin halvings usually made its price reach new record highs in the months after. However, this time it's different because Bitcoin's price already hit a new high before the halving.

The recent surge in price was driven by Bitcoin exchange-traded funds (ETFs), showing that demand from that market might have a bigger impact on Bitcoin's price than halving events.

Some experts see this halving as a symbol of Bitcoin's steady monetary policy, especially when traditional currencies face uncertainties like inflation and interest rates.

However, analysts from JPMorgan and Deutsche Bank believe that the halving's impact on Bitcoin's price is already considered in current prices and may not cause a big price increase afterward.

They think the halving might mainly affect Bitcoin mining, possibly leading to consolidation in the industry due to lower profitability.

But miners could still earn more through transaction fees from new developments like layer-two networks, even if the halving doesn't cause a price surge.

The upcoming/next Bitcoin Halving is scheduled for 2028, and the reward will be reduced to 1.5625 from the current price 3.125 for a miner that successfully processes a block of transaction data.

What are your thought about Bitcoin Halving? Let's us know in the comment section. Cheers!

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About the Author

With five years experience in Media, Temmy Samuel's become a modern journalist, delivering impressive reporting about tech, finance, business and science around the world. More About Temmy

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