The next Bitcoin halving is already closer than the previous one. What does this mean for crypto investors?
On Thursday, May 5, the crypto community celebrated another mini-anniversary for Bitcoin : the cryptocurrency has overcome exactly half of the way to its next halving. This happened on block number 735,000, which was mined by the Poolin pool with an income of 0.16215354 BTC or $6402.45 in commissions. Halving in the Bitcoin network occurs every 210 thousand blocks, that is , a little less than 105 thousand blocks are left until the next such event. Let's talk about the situation and its importance in more detail.
Halving is the reduction of mining rewards and the creation of a new block in the Bitcoin network, which miners receive. The event occurs every 210 thousand blocks, or approximately once every four years. At the same time, the rules of this procedure are written in the cryptocurrency code, which means that it is simply impossible to influence it without the expressed consent of the majority of blockchain users.
Halving is the reduction of mining rewards and the creation of a new block in the Bitcoin network, which miners receive. The event occurs every 210 thousand blocks, or approximately once every four years. At the same time, the rules of this procedure are written in the cryptocurrency code, which means that it is simply impossible to influence it without the expressed consent of the majority of blockchain users.
When will the Bitcoin halving take place?
Halving cycles are one of the main mechanisms of the Bitcoin network, which involves cutting the BTC reward for miners by half. Accordingly, the emission of bitcoins is also halved, since the remuneration of miners - not counting commissions - is the only source of issuance of new coins.
From the inception of Bitcoin to the first halving, miners were rewarded with 50 BTC per block. Then the amount in bitcoins decreased to 25 BTC, and in the next cycle to 12.5 BTC. Now miners get 6.25 BTC for mining a block. This process is shown more clearly in the diagram below, provided by the news outlet Cointelegraph .
The previous halving took place on May 11, 2020. The next halving is expected to take place in April 2024. The date of the halving can be predicted with an accuracy of a couple of days, because the block mining time fluctuates around 10 minutes thanks to the automatic difficulty change mechanism. That is, the emission of Bitcoin is completely transparent and predictable , unlike the dollar, euro and other traditional currencies.
Halvings are considered very important events for Bitcoin for another reason - some time after the previous cycles, there was an explosive increase in the price of the main cryptocurrency. For example, before the first halving, BTC cost about $127, before the second halving its price rose to $758, and before the third — to $10,943.
It is important to note that the halving itself does not have a magical effect on Bitcoin and its rate. Yes, it reduces the number of new coins in circulation, but the vast majority of them have already been mined, that is, the situation with BTC circulation does not change much.
Most likely, the time of the halving approximately coincides with the rise and fall cycles of Bitcoin and the cryptocurrency niche in general, which are common to all assets and markets. That is why some crypto enthusiasts suggest that it is halving that leads to growth - although in fact it is just a gradually subsiding and growing interest of investors.
We believe that halving does not lead to market bullruns on its own. However, it accurately confirms the operation of the blockchain in accordance with predetermined rules. It also draws attention to cryptocurrencies of people outside of this area.
Another exciting piece of news this week is the details of Twitter's purchase by billionaire Elon Musk. After the event itself, it turned out that the Binance cryptocurrency exchange also took part in the transaction. Binance CEO Changpeng Zhao confirmed that his company added $500 million to the $44 billion that Elon bought the social platform for.
The purchase announcement lists several other entities with additional contributions: Sequoia Capital ($800 million), Andreessen Horowitz ($400 million), Qatar Holding ($375 million), Fidelity ($316 million), DFJ ($100 million) and other well-known institutional investors. The total amount of support from this list of investors is approximately $7.1 billion.
Since the majority of crypto discussions take place on Twitter, it's no surprise that the news of Musk's acquisition of the platform caused so much hype. The billionaire himself has also been an active member of the crypto community for quite a long time. It was he who became the main reason for the rapid growth of Dogecoin at the beginning of last year.
His campaign to acquire Twitter began on April 4, when Musk first bought a 9.2 percent stake in TWTR . Shortly thereafter, he was included on the board of directors of the company, but a few days later he resigned this position. He eventually made an offer to buy the company, and on April 25, the company's management eventually accepted the $44 billion offer. Now the billionaire is looking to integrate a host of innovations into Twitter, many of which may be related to the crypto market.
We believe that the next Bitcoin halving will also attract a lot of attention to the cryptocurrency space. Perhaps the event will not lead to the growth of coins: nevertheless, as the sphere of digital assets matures, the mentioned
Look for even more interesting things in our millionaire crypto chat . There we discuss other important events that in one way or another affect the world of decentralization.
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