Bitcoin has undergone its fourth halving, which took place on Friday. This event has raised questions about its impact on the cryptocurrency’s price. The halving process is a significant event that occurs approximately every four years and regulates the total supply of Bitcoin, which is capped at almost 21 million coins.
The recent halving signals a potential increase in demand for Bitcoin as the supply has been reduced. Miners now receive only 3.125 Bitcoins per block instead of 6.25, which can make mining less profitable and potentially centralize the market. As the last Bitcoin is projected to be mined in 2140, transaction fees will become more important to ensure the security and stability of the network.
Despite economic theory suggesting that the halving should not impact the price of Bitcoin, historical data has shown significant price increases following previous halvings. The timing of the halving is difficult to predict due to the decentralized nature of the Proof-of-Work consensus process, which allows for deviations in mining times. However, it is clear that this event plays a crucial role in shaping the future of Bitcoin and its ecosystem, leading to renewed confidence in cryptocurrencies overall.