What is Bitcoin Halving in 2024 and why should it matter to you? - Reading time: about 7 minutes

As we count down to the next big Bitcoin event in 2024, the Internet is buzzing with excitement. But what's all the noise about? It's called Bitcoin Halving, and it's something that could affect Bitcoin’s price. Let's break it down in simple terms.

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 What is Bitcoin Halving?

Imagine you have a coffee stand, and every time you sell a cup of coffee, you get $2. But what if, after a while, the customers say, "Okay, now you only get $1 for each cup of coffee?" That's an analogy of what happens in Bitcoin’s halving event. Miners, who help make sure Bitcoin transactions are secure, used to get a lot of Bitcoin for their work. But every four years or so, that amount gets cut in half. This makes it difficult for miners to get Bitcoin, which can affect how much Bitcoin is out there for people to buy.

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 How Does Bitcoin Halving Work?

Bitcoin runs on something called a blockchain, which is like a digital ledger that records all transactions. Miners use powerful computers to solve complex cryptographic puzzles known and add new transactions to this digital ledger. For every puzzle they solve, they used to get a big reward of Bitcoin. But with halving, that reward gets smaller over time. It's all part of Satoshi’s plan to make sure there aren't too many Bitcoins flooding the market, since there's only going to be 21 million total Bitcoins.

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What Happened Last Time?

Bitcoin's first halving event occurred on November 28th, 2012, when mining rewards were cut from 50 to 25 Bitcoins per block. At that time, the price was around $12.40 per Bitcoin. Within 371 days, the price surged to $1,237.60 per Bitcoin, marking a remarkable 9881% increase and signaling Bitcoin's potential for growth.

Moving ahead to July 9th, 2016, the second halving event brought excitement as block rewards dropped from 25 to 12.5 Bitcoins per block. Within 525 days post-halving, it saw a rise to $19,345.50 a staggering 2868% increase, rewarding very early adopters with substantial profits.

Jumping to May 11th, 2020, the third halving event occurred. Bitcoin's mining rewards halved from 12.5 BTC to 6.25 BTC per block. Post-halving, the price rose to about $67,527.90 only 546 days later, gaining about 687%. During this period, Bitcoin speculation was high, and institutional investors began adopting the currency into their portfolios.

Looking ahead to 2024, Bitcoin's price is currently trading at around $65,500, a 105,968,225% increase since its inception. The mining rewards for the 2024 halving event are expected to drop to 3.125 BTC per block. This milestone foreshadows previous historic halving events, where Bitcoin experienced significant price increases afterward. With the halving event on the way, it's clear that the crypto community eagerly anticipates this event for potential gains.

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What Could Happen This Time?

The next Bitcoin halving is expected to occur in April 2024, when the number of blocks hits 740,000. It will see the block reward fall from 6.25 to 3.125 Bitcoins. The exact date of the Bitcoin halving is not yet known, as the time taken to generate new blocks varies, with the network averaging one block every ten minutes.

In addition, some people think the same thing will happen in 2024. They believe that because there will be fewer new Bitcoins coming out, people might want to buy more of them. And when more people want something, its price usually goes up. But it's hard to predict for sure since most often it's speculation, and you’ll never really know for sure what’s going to happen. Think of it like predicting the weather.

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The Impact on Bitcoin's Price

Why does all this matter? You see, the price of Bitcoin can go up and down a lot, just like the price of other things you might buy, like food or oil. Some people buy Bitcoin because they think the price will go up over time, and they want to make a profit. Others buy it because they believe in the technology behind it and also because they can hedge against inflation.

The halving event is important because it affects the supply of new Bitcoin entering the market. When there are fewer new Bitcoins available to be mined, and if demand remains strong, the price of Bitcoin may go up. This is because people may be willing to pay more to get their hands on a limited supply of Bitcoin. On the other hand, it's essential to remember that the price of Bitcoin is influenced by many factors, including investor sentiment, regulatory developments, and macroeconomic trends.

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How to trade the Bitcoin Halving event?

So, what should you do if you're interested in Bitcoin Halving? Firstly, it's important to educate yourself on blockchain technology and how it works. While Bitcoin has the potential for significant profits, it's also highly volatile and can have sudden price swings. Take note to only invest what you can afford to lose and to diversify your investment portfolio to limit risks. It’s also a good idea to stay informed about news and developments in the Web3 space. This can help you make more informed decisions about when to buy or sell Bitcoin.

To participate in Bitcoin Halving, you can buy or sell Bitcoin on Probit Global. For users who are new to crypto, you can use ProBit Global’s Buy Crypto feature to seamlessly purchase BTC. Opting for BTC spot purchases can help mitigate risk associated with futures or derivatives trading.

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 Conclusion

In conclusion, Bitcoin Halving is a significant event that can have an impact on the price of Bitcoin. While some people believe that halving events lead to price increases due to decreased mining supply, others caution that the market's response may vary. Regardless, it's crucial to approach investing in Bitcoin with caution. By understanding the basics of Bitcoin Halving and staying updated, you can make more informed decisions about whether to invest in Bitcoin. Investing in Bitcoin carries risks, and it's essential to only invest what you can afford to lose. Remember, while insights are valuable, this article does not provide any financial advice. So, navigate the dynamic realm of digital assets with caution and invest at your own discretion.