The crypto space is built around a plethora of complexities, such as Bitcoin halving. There are numerous aspects that play huge parts in how everything works in the crypto space. While it is no easy feat to learn about everything all of a sudden, there are some factors you need to learn about before you start buying or trading crypto. As mentioned above, BTC halving is one such complex idea crypto enthusiasts need to be familiar with before they dive into anything else.
Since there is a lot to learn in the crypto space, crypto enthusiasts should always take one step at a time and learn as much as possible so they end up facing less challenges and complexities.
If you are a BTC enthusiast and want to invest in it and eventually trade it then you need to know about the concept of halving, how it impacts the market and when the next Bitcoin halving will occur. All these essential details are mentioned below.
What Does Bitcoin Halving Mean?
Halving, as the term suggests, means that the future supply of the crypto king is reduced to half. It is quite a popular term in the crypto trading community as it has some implications that make quite the difference in the crypto space.
The information mentioned below can help new traders and investors in understanding what it actually means and what is its benefit.
The reason why halving occurs is because it cuts the total supply of BTC in half as mentioned above. Now the benefit of doing so is that Bitcoin is kept from inflation and since the demand of the crypto king keeps increasing, but the supply is limited, the price and value of the crypto king keeps increasing as well.
This process occurs after every four years and the timeline for the next Bitcoin halving is discussed below.
What Halving BTC Means for the Miners?
New BTC coins are created by miners through the process of mining. When miners validate a transaction on the Bitcoin network, they are awarded new BTC. However, when Bitcoin halving occurs, the new BTC that are to be awarded to the miners are reduced in half.
This also results in a drop in the number of BTC that are created from block validation that reduces the supply, while the demand for BTC remains high.
Does BTC Halving Affect the Crypto Market?
Bitcoin is the first and largest digital asset in the world and has an undeniable significance and dominance on the crypto market. Whenever the price of the crypto king moves up or down, the prices of other altcoins also rise and fall.
However, when the price of BTC is moving in a positive trajectory, the prices of the other cryptocurrencies tend to fall. This is because investors are quick to withdraw their investments from altcoins and place them in the crypto king instead to benefit from the surge in price that usually occurs after the halving process is complete.
Timeline of the Halving Processes
Bitcoin was created in 2009. For an unknown reason, the creator of the flagship crypto asset specified that the total number of BTC to ever be created is 21 million.
At the launch of the Bitcoin network in 2009, the block reward was 50 BTC per block.
As mentioned above, Bitcoin halving occurs after every four years, therefore, the first halving took place in 2012, reducing the block reward to 25 BTC per block.
The second halving process occurred after four years in 2016. The block reward was reduced once again, amounting to 12.5 BTC per block.
The third halving occurred in 2020 and reduced the block reward further to 6.25 BTC.
According to this timeline, the next Bitcoin halving is set to take place in 2024. At the time of the fourth halving, the block reward will reduce to 3.125 BTC per block.
Can you Benefit from Halving?
Since Bitcoin halving is a major aspect that plays a key role in the crypto industry, there are more than one ways how it impacts the crypto space and everything related to BTC.
People who have been in the crypto space for quite some time and are familiar with trading, make use of a few strategies to benefit from BTC halving. The best strategy is to purchase and hodle BTC, where enthusiasts can store the flagship crypto asset in a wallet address until the halving process has been completed, as it is likely to result in a price surge for BTC.
Final Takeaways!
Bitcoin halving is a major concept every BTC enthusiast needs to know about, especially if they intend on trading the crypto asset eventually. Anyone interested in know what halving is and other related aspects should take a look at the information mentioned above.
