Global cryptocurrency leader Bitcoin has undergone its fourth halving event, maintaining stable price trends with a marginal dip of 0.47% to $63,747 per coin (approximately SGD 86,778).
Understanding Bitcoin Halving
Bitcoin halving is a programmed adjustment in its blockchain protocol designed to reduce the rate of new coin generation by cutting "mining" rewards by 50%. This mechanism increases the cost of introducing new coins into circulation.
Chris Gannatti, Global Head of Research at WisdomTree (a firm offering Bitcoin ETFs), emphasized that halving ranks among "the most significant events in crypto this year."
Key Features of Halving:
- Supply Cap: Bitcoin’s pseudonymous creator Satoshi Nakamoto hardcoded a maximum supply of 21 million coins.
- Frequency: Occurs roughly every four years (last halving: May 11, 2020).
- 2024 Timing: Triggered at midnight GMT on Saturday (per CoinGecko’s countdown).
Market Reactions and Analyst Predictions
Price Trends:
- 2022–2023: Bitcoin plummeted in 2022 but rebounded sharply in 2023.
- March 2024: Peaked at an all-time high of $73,803.25.
- Pre-Halving (April 18): Traded at $63,800.
Post-Halving Outlook:
- J.P. Morgan Analysts: Argue the halving is already priced in, forecasting a decline due to "overbought" conditions and subdued crypto venture capital.
- Contrasting Data: Economic Times noted Bitcoin’s immediate 0.47% drop post-halving, while Securities Times reported a later recovery to $63,914 (~SGD 87,000).
Regulatory Perspectives
Financial regulators consistently warn that Bitcoin remains:
- A high-risk asset with limited real-world utility.
- Subject to speculative volatility despite growing ETF approvals.
FAQs
1. Why does Bitcoin halving occur?
Halving is protocol-enforced to control inflation by slowing new coin supply, mimicking scarcity akin to precious metals.
2. How does halving impact miners?
Miners’ rewards drop by 50%, potentially squeezing profit margins unless Bitcoin’s price compensates.
3. Will Bitcoin’s price surge post-halving?
Historical surges followed past halvings, but analysts debate whether current markets have already adjusted.
4. What’s the long-term effect of halving?
Reduced supply could increase scarcity-driven value if demand remains steady or grows.
5. Is Bitcoin a safe investment?
Regulators classify it as high-risk; investors should assess volatility and regulatory shifts.
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