What is halving
Halving is a programmed event in the Bitcoin protocol that occurs approximately every four years or after 210,000 blocks have been mined. During halving, miners’ rewards for creating new blocks are cut in half – fewer new bitcoins are put into circulation, reducing inflation.
Halving is important to Bitcoin tokenomics – it allows you to control the supply of BTC and increase the scarcity and value of the cryptoasset over time. The total number of bitcoins is capped at 21 million, and the halving process ensures that this limit will be reached at a predictable rate over time.
Slowing down the issuance of new bitcoins through halving also contributes to a more equitable distribution of cryptocurrencies. By limiting the release of new coins, halving ensures that early adopters do not gain an unfair advantage over new market entrants.
The Bitcoin network already has three halving in its history, and the fourth will take place next year – about four years after the last award reduction, which occurred in May 2020. The exact dates of the halving are not known in advance. More than 90% of all bitcoins have been mined to date, and it is estimated that the last coin will be mined by 2140.
The original reward for mining a block by miners was 50 BTC. It then decreased to 25 BTC in 2012, to 12.5 BTC in 2016, and to 6.25 BTC in 2020. Next Halving will reduce the block reward to 3.125 BTC in 2024. After the 32nd halving, the block creation process will stop and new bitcoins will cease to be issued. At that point, the maximum offer of 21 million BTC will be reached.
The impact of halving on the price of BTC
Bitcoin has gone through four bear markets since its inception in 2009. So far, each downturn has been followed by a powerful bull market in which the price of cryptocurrency has risen. According to historical data, bear market periods have often coincided with the period between halwings. That said, bitcoin’s price started rising in the months before the halving and continued to rise after the reward cut until bitcoin re-entered a bear market.
In 2011, the year before the first halving, bitcoin rose to about four times its original value. The cryptocurrency also doubled in 2015, the year before the second halving. However, in 2020, the year before the third halving, the cryptocurrency was showing a decline and only started to rise six months before the award was cut, showing a 300% increase.
In addition, bitcoin also grew in value strongly in the year after all previous halving cycles, from 3x to 90x its value. Based on historical data, we can assume that bitcoin will start rising again a few months before the next halving and will reach a new all-time high a year after it;
However, it is important to realize that the more popular bitcoin becomes, the more it becomes entwined in the global financial system and the more it is pressured by various factors to which it was less exposed in previous years. Regulators are increasingly turning their attention to regulating cryptocurrency exchanges, and macroeconomic and geopolitical unrest is also affecting the price of the first cryptocurrency.
Halving preparations
Bitcoin’s next halving is just over six months away – for those looking to capitalize on the next bull cycle and profitably sell their coins, it’s time to prepare for the big event. It is better to withdraw coins from exchanges to your wallet in advance so that you don’t face withdrawal restrictions during periods of high volatility.
Before depositing coins, it is worth clearing them through a mixer such as Mixer.money. Any user can encounter “dirty” coins today – it is enough to make an unsuccessful P2P transaction to become the owner of bitcoins from the darknet. Such coins are difficult to sell on major exchanges and exchanges (where the most favorable rate is usually), as most such platforms use analytics software to identify cryptoassets involved in illegal activity.
With Mixer.money’s “Full Anonymity” feature, you can completely clear your coins – the user gets bitcoins from major cryptocurrency exchanges with a turnover of 1,000,000 BTC per day. It becomes impossible to trace the origin of the coins, such bitcoins are not detected by analytics software as having been involved in the mixing;
You can use TOR-mirrors for mixing, as well as the official Mixer.money bot in Telegram. Coin clearing takes up to six hours, and the service’s maximum commission is up to 5% via the website and up to 4.5% via bot + 0.0007 BTC.
Bitcoin’s previous behavior before the halwings gives hope for a bull market to begin soon, which would be a logical conclusion to the protracted cryptozyme. Get your bitcoins ready to sell early and make the most of the next rally.