The Bitcoin halving is set to happen in April 2024. Here's what to expect👇 First, let's reflect on the Previous Halving:
âž– In 2020, after the last halving, the block reward dropped to 6.25 BTC âž– Bitcoin's hash rate dropped by 30% within two weeks. âž– Bitcoin's miner difficulty was also automatically reduced shortly after that, leading to new all-time highs in the hash rate just seven weeks after the halving. âž–Following the previous halving in May 2020, the price moved to a new all-time high within 8 months.
Implications of the Upcoming Halving:
âž–The rewards issued to miners per block will be reduced from 6.25 BTC to 3.125 BTC. This decreases Bitcoin's inflation rate from 1.7% to just 0.85% per year. âž–We can expect Bitcoin's hashrate to drop shortly after the halving. âž–The reduction in issuance also translates to potentially less Bitcoin being sold by miners. âž–While the direct impact of lower issuance is small, historically miners' volume share decreases after the halving. This strongly decreases the market impact of miners selling.
There is one important way in which this halving is very different. Price has already reached a new ATH ahead of the halving, with investors aiming to frontrun the 'halving effect'. So while long-term selling pressure will diminish after the halving, short-term investors who acquired Bitcoin ahead of the halving may be looking to break-even