Bitcoin, the world’s leading cryptocurrency, underwent a programmed reduction in its new coin creation rate on April 19. This event, known as a “halving,” occurs roughly every four years and is designed to slow down the overall supply of Bitcoin as per CoinGecko.
Following the halving, Bitcoin’s price remained relatively stable, experiencing a slight dip of 0.47 per cent to settle at USD 63,747. The event was highly anticipated by cryptocurrency enthusiasts who believe it will solidify Bitcoin’s value as a scarce asset. Bitcoin’s founder, Satoshi Nakamoto, capped the total supply at 21 million coins.
The halving comes after a period of significant price fluctuations for Bitcoin. Bitcoin in March 2024, reached an all-time high of USD 73,803.25 but has since fallen back somewhat. The broader cryptocurrency market has also been buoyed by the recent approval of spot Bitcoin ETFs in the United States and the expectation of lower interest rates.
What do experts believe?
Andrew O’Neill, a crypto analyst at S&P Global, said he was “somewhat sceptical of the lessons that can be taken in terms of price prediction from previous halvings,” as quoted by Reuters.
“It’s only one factor in a multitude of factors that can drive price,” he said.
Ahead of the event, JPMorgan analysts expected Bitcoin’s price to fall after halving as it was “overbought” amid tepid crypto funding, as quoted by Reuters.
“We do not expect bitcoin price increases post halving as it has been already priced in,” JP Morgan analysts wrote this week.
What does Bitcoin halving mean?
Bitcoin halving is a pre-destined event written into Bitcoin’s code that happens roughly every four years. It cuts the reward miners get for verifying transactions in half, thereby slowing down the rate at which new bitcoins enter circulation. This mimics scarcity in precious metals, potentially increasing Bitcoin’s value over time as demand remains steady or rises.
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Published: 20 Apr 2024, 06:41 AM IST