Bitcoin’s halving event, a key aspect of its protocol, has occurred once again, reducing the rewards for miners and consequently slowing the rate at which new Bitcoin enters circulation. This event, occurring approximately every four years, serves to limit the total supply of Bitcoin to 21 million units by the year 2140.
With the halving, the daily creation of Bitcoin has now been reduced to just 450 units. This mechanism, ingrained in Bitcoin’s code since its inception, aims to manage inflation and maintain scarcity, factors that contribute to its value proposition.
Despite the anticipation surrounding the halving, Bitcoin’s price remained stable at $63,747 (£51,531), suggesting that the market had already priced in this event. Historically, however, previous halvings have eventually led to significant price increases, offering hope for investors seeking substantial gains in the future.
Andrew O’Neill, a crypto expert at S&P Global, cautions against over-reliance on past halving events for price predictions, highlighting that numerous factors influence Bitcoin’s price dynamics. With the Bitcoin price currently fluctuating around the mid $60,000’s, the impact on its price has not really been confirmed either way.
Despite skepticism and warnings from figures like Bank of England governor Andrew Bailey regarding the intrinsic value and efficiency of cryptocurrencies, Bitcoin continues to gain legitimacy and adoption with the adoption of Exchange Traded Funds (ETF’s) notably in the U.S., and Hong Kong while the UK has recently announced trading on the LSE of crypto Exchange Traded Notes (ETN’s) which to be rolled out from 28th May 2024.
Its recent high of $73,803 (£59,661) and the inclusion of Bitcoin funds (ETFs) on the US stock exchange signify growing acceptance within mainstream finance, albeit with lingering concerns about volatility and risk.
With over 19.5 million Bitcoin already mined, the remaining 1.5 million units are expected to be gradually mined over the next 116 years, emphasising the finite nature of Bitcoin and its deflationary model.
In summary, Bitcoin’s halving event underscores its unique economic design and the ongoing evolution of the cryptocurrency landscape amidst broader financial and regulatory developments, while there has been no discernible short-term impact on the Bitcoin price with other factors coming into play.
(Source: Sky News)