Bitcoin halving is coming near. Will this rare phenomenon make the crypto more expensive or is more volatility on the cards?
In the mysterious cosmos of cryptocurrencies, there exists a phenomenon called Bitcoin halving. Picture this: a cosmic dance of miners, investors, and enthusiasts, all eagerly awaiting the rare occurrence that has profound implications for the future of the world’s most famous cryptocurrency.
Bitcoin operates on a schedule governed by code. Roughly every four years, or after every 210,000 blocks are mined, Bitcoin experiences a halving event. This event reduces the reward miners receive for verifying transactions by 50%. As the supply of new Bitcoins dwindles, demand potentially surpasses supply, thus, propelling the price skywards. According to experts, the halving is expected between April 20 and 23 of this year.
According to Rajagopal Menon, Vice President at crypto exchange WazirX, the halving event needs to be seen in the context where the institutional demand for Bitcoin is already surging, especially via exchange-traded funds (ETFs). “This influx of institutional capital heightens the impact of halving events, fuelling market volatility and speculation,” he says.
For the miners of the Bitcoin cosmos, the halving presents both a challenge and an opportunity. With rewards slashed in half, miners must rev up their computational engines to compete for a smaller slice of the Bitcoin pie.
As for investors, there’s a mix of excitement and trepidation. Will Bitcoin ascend to new astronomical heights? Or will it plunge into a black hole of volatility? For Edul Patel, CEO & Co-Founder of crypto exchange Mudrex, historically, halving led to massive price surges for Bitcoin. “For instance, during the first halving in 2012, Bitcoin’s price skyrocketed from $13 to a peak of $1,152 the following year,” he notes.