Bitcoin Halving 2024: Why It Matters & What To Expect 

Bitcoin Halving Prediction - 2024

Bitcoin's highly anticipated halving event, set for April 2024, is stirring excitement in the crypto community. Historically, halving events have sparked significant interest and bullish sentiment among investors, often leading to notable price surges.

Since the inception of Ethereum, the altcoins sector has shown a strong linkage to the biggest crypto, Bitcoin. As mentioned before, Bitcoin halving has created bull runs in Bitcoin prices, leading to phenomenal returns in the halving years.

With a close linkage to Bitcoin, the altcoin sector repeats a similar story with amplified returns, thanks to their lower market cap. In the past two Halving years, 2016 and 2020, the altcoin industry market cap increased by 1027% and almost 300% annually, respectively.

With just a few left for the Bitcoin Halving 2024 and the solid start of 65% in the first three months of 2024, the sector is setting the stage for a massive surge.

Further, the following year of Bitcoin Halving maintains the momentum to prolong the uptrend. Hence, 2024 and 2025 could bring massive returns for altcoin HODLers.

Based on historical moves, market experts predict Bitcoin's price will surpass $100,000 in 2024. However, the impact of the 2024 halving will depend on many factors, including market adoption, regulatory developments, pending decisions on Bitcoin Spot ETF, and broader economic conditions.

Why does Bitcoin halving happen?

• Controlled Supply: As mining rewards decrease, miners rely more on transaction fees, helping to keep the Bitcoin network secure and sustainable in the long run.
• Inflation Control: The halving event in Bitcoin lowers the rate of new Bitcoin creation, effectively slowing down the increase in total supply and reducing the inflation rate.
• Increasing Scarcity and Potential Value: The halving can make Bitcoin scarcer, potentially increasing its value if demand stays the same or rises, similar to essential supply and demand principles.
• Encouraging Investment: The expectation of a Bitcoin halving can spark investor interest, as they often see the slower supply growth as a sign that Bitcoin's value could rise.
• Network Security and Miner Incentive: As mining rewards decrease, miners rely more on transaction fees, helping to keep the Bitcoin network secure and sustainable in the long run.

How Bitcoin Halving Takes Place?

Bitcoin halving is a process designed to control the creation of new Bitcoins and help regulate the total supply. Here's a simple example to explain how it works:

Imagine a small village where gold mining is the primary source of income. Every four years, the village council decides to reduce the amount of gold each miner finds by half. Initially, miners find 100 grams of gold per day. After four years, this amount is reduced to 50 grams per day, then 25 grams after another four years, and so on.

Something similar happens in the Bitcoin network. The Bitcoin network is maintained by miners who use their computing power to process and secure transactions. In return, they are rewarded with new Bitcoins.

Initially, when miners successfully added a block of transactions to the blockchain (Bitcoin's digital ledger), they were rewarded with 50 Bitcoins. However, this reward is halved every 210,000 blocks (approximately every four years). So, after the first 210,000 blocks, the reward was reduced to 25 Bitcoins, then to 12.5 Bitcoins after the following 210,000 blocks, and so on.

This mechanism is fundamental to Bitcoin's design to ensure its scarcity and value over time. It's like the village council's decision to reduce the gold output, ensuring that gold remains valuable because it becomes more scarce.

Impact of Bitcoin Halving on Miners

The impact of Bitcoin's halving on miners is significant and multifaceted. The reward for mining new Bitcoin blocks is halved, which means miners receive 50% less Bitcoin for every block they successfully mine than before the halving.

Here are some of the critical impacts of this event on miners:

Each halving event is unique, and various factors, including the state of the broader economy, technological advancements in mining, and changes in regulatory landscapes, can influence its impact. The long-term effects of halving are complex and can vary based on how miners and the broader Bitcoin community adapt to these changes.