On April 19th, in London, the biggest cryptocurrency, Bitcoin, has just finished its “halving” event happening about every four years. This information is confirmed by a company, named CoinGecko which is an expert in analyzing cryptocurrency data. Bitcoin was fairly stable immediately afterward, dropping just 0.47% to $63,747.
“Halving” is defined as a change to the cryptocurrency’s underlying technology designed to cut the rate at which new bitcoins are created. The aspirants of Bitcoin were eagerly waiting for it.
A spurious creator Satoshi Nakamoto converted harving into Bitcoin’s code at its inception in such a way as to reduce the rate at which bitcoins are created. Chris Gannatti, who is the global head of research at asset manager WisdomTree (A company that advertises bitcoin exchange-traded funds), called the having one of the biggest events in crypto this year.
For some crypto enthusiasts, the halving will underscore Bitcoin’s value as an increasingly scarce commodity. Nakamoto decided there would only ever be 21 million bitcoins. But skeptics think the halving is just something talked about by people trying to make Bitcoin’s price go up.
The rewards that cryptocurrency miners get for making new tokens are divided into half in ‘halving’. But in this way, it will become very difficult and yet so expensive to create new coins. According to the latest reports, the prices of bitcoins reached a maximum level of $73,803.25 in March.
After a huge downfall in 2022, it gradually went up again in 2023. Now, it is trading at a rate of $63,800. Nowadays, Bitcoin and other cryptocurrencies are stable because people are eager about the U.S. Securities and Exchange Commission’s decision in January. They approved spot bitcoin exchange-traded funds, which is like a special way to invest in Bitcoin. Also, people expect that central banks will lower interest rates, which could help cryptocurrencies too.
Halvings had already been done in 2012, 2016, and 2020. Some crypto enthusiasts objected that after each halving, Bitcoin’s price went up to its peak, and the same will happen with the next halving, but many analysts are skeptical. JP Morgan, a well-known analyst said this week “We do not expect bitcoin price to increase after halving as it has already priced in”. They think that the rate might go down after the halving process because Bitcoin has been bought a lot already, and there hasn’t been much new investment in the crypto industry this year.
Financial regulators have always warned that Bitcoin is a high-risk asset and doesn’t have many real-world uses. But now, they are starting to approve trading products linked to Bitcoin.
Andrew O’Neill, a crypto analyst at S&P Global, said he was “somewhat skeptical of the lessons that can be taken in terms of price prediction from previous halvings”. He said, “It’s only one factor in a multitude of factors that can drive price”.
Bitcoin has strived for direction since March’s record high and went down in the last two weeks. This is partly because of tensions between countries and because people think central banks will keep interest rates high for longer.
