Halving is a phenomenon that shakes the cryptocurrency market every four years. A 50% reduction in miners’ rewards for mining new blocks is at the heart of the Bitcoin halving.
To better understand, imagine that halving is a way to save the precious resource – Bitcoin.Just as gold mining becomes more difficult with the depletion of reserves, so is Bitcoin mining without halving. How halving helps, you may ask! By limiting Bitcoin’s production speed, maintaining its value and scarcity and protecting the market from currency inflation. This increases the value of Bitcoin as it becomes limited!
Why is halving important?
The halving precedent has already been met several times in the history of Bitcoin, however, not everyone still understands its meaning. Halving has a significant impact on the BTC ecosystem. Let’s explain why!
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Deficit
Reducing the remuneration of miners can create a shortage of bitcoins, which in turn can lead to an increase in their price.
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Improving Security
Halving encourages miners to invest in more efficient mining equipment to compensate for the reduced rewards. This increases the total computing power of the Bitcoin network, making it more secure and resistant to attacks.
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Attracting new investors
New investors see in this process the opportunity to profit from the expected increase in the price of bitcoin. This leads to an increase in demand for bitcoin and a further increase in its price.
What to expect from the 2024 halving?
The next halving is predicted to be in April 2024. Experts predict that halving 2024 will have a significant impact on the cryptocurrency market (BTC, ETH, USDT). Here are some possible consequences:
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Bitcoin price rise
A deficit created by halving, could subsequently lead to a significant rise in Bitcoin prices.
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Increased mining activity
Miners will seek to offset the reduction in remuneration by increasing their activity.
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Increased volatility
Halving may cause increased volatility in the cryptocurrency market as investors respond quickly to changes in bitcoin’s supply.
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