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The highly anticipated Bitcoin “halving” event takes place | Science and technology news
Previous halvings have produced big gains over the long term, but analysts warn that that doesn’t automatically mean the same thing will happen this time.
By Dan Cairns, journalist
Saturday 20 April 2024 03:45, UK
According to crypto analytics firm CoinGecko, the rare Bitcoin halving has occurred.
Cut the number of new things Bitcoin enter the market by cutting the rewards earned by Bitcoin miners by 50%.
It takes place roughly every four years and is designed to limit supply to 21 million by 2140.
This means that only 450 Bitcoins will now be created every day.
Halvings also took place in 2012, 2016, and 2020, and the mechanism was written into Bitcoin’s code when it was first created.
The cryptocurrency’s price remained stable at $63,747 (£51,531) after the halving, with analysts saying the expected event had already been priced in.
Investors are hoping that a big rally isn’t too far away, though, after previous halvings led to significant gains.
The price at the halving in May 2020 was around $8,600, but a year later it rose to over $56,000.
Andrew O’Neill, a cryptocurrency expert at S&P Global, said he was “a bit skeptical about the lessons that can be learned in terms of price prediction from previous halvings.”
“It’s just one of many factors that can affect prices,” O’Neill said.
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Bitcoin it hit a new high of $73,803 (£59,661) in March after increasing 175% in the previous 12 months.
It also received a boost in legitimacy in January, when funds (ETFs) holding Bitcoin were allowed to trade on the US exchange.
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The traditional financial industry has traditionally viewed Bitcoin as extremely high risk and prone to unpredictable and dramatic price swings.
Bank of England governor Andrew Bailey warned as much in 2021 cryptocurrencies they have “no intrinsic value” and investors should be “prepared to lose all their money.”
He also told MPs in January that cryptocurrencies were “quite inefficient” and were still “not taking off as a core financial service”.
To date, more than 19.5 million Bitcoins have been mined, leaving only 1.5 million that can be mined over the next 116 years.
The halving occurs every 210,000 “blocks”, or approximately every four years.