What is Bitcoin Halving? Why is Bitcoin Halving a great investment opportunity?

Currently, when mentioning the main reason driving a new uptrend of the market, many people will probably mention the concept of Bitcoin Halving.

So what is Bitcoin Halving? Why is this an important event that can help you change your position? In this article, Allinstation will help you find understanding and answers!

What is Bitcoin Halving?

Bitcoin halving is the process of halving the block reward of Bitcoin mining. It occurs approximately every 4 years, corresponding to every 210,000 blocks mined, until all 21 million Bitcoins have been mined (expected in 2140).

The next Bitcoin Halving is expected to occur in March or April 2024. In the past, Bitcoin has gone through 3 Halving periods with the timelines being November 28, 2012, July 9, 2016, respectively. May 12, 2020.

Why is there Bitcoin Halving?

To understand how Bitcoin halving works, we need to understand how the Bitcoin network works. Blockchain is the core technology of Bitcoin, consisting of a set of nodes that run software and store the history of transactions on the network. Each node approves or rejects new transactions. Transactions are aggregated into blocks, which are then approved and appended to the existing blockchain.

Bitcoin mining is the process of using computers to verify and validate transactions on the blockchain. Miners must solve complex mathematical equations on the Bitcoin network to verify transactions. Once successful, they are rewarded with Bitcoin.

When all 21 million Bitcoins are mined, miners will no longer be rewarded with Bitcoins but instead with transaction fees. This fee ensures miners remain motivated to keep the Bitcoin network running.
Impact of Bitcoin Halving on Bitcoin price

Bitcoin Halving Could Fuel a New Bull Run for Bitcoin
The Bitcoin Halving process includes the following steps:

Halving the reward: The default reward for each new block will be halved.
Reduced inflation: Such a reduction in rewards helps reduce the inflation of Bitcoin.
Reduced supply: When rewards decrease, the supply of Bitcoin also decreases.
Increase demand: Reducing the supply of Bitcoin can increase demand and increase the value of Bitcoin.
Coin price increase: If Bitcoin value increases, reducing the reward will not affect the motivation of miners.
The miner's reward remains the same even though the reward rate is lower.
As you can see, in order not to demotivate miners from contributing to the platform. The price of Bitcoin must increase so that the miner's reward does not decrease. This is the key to driving the new uptrend for Bitcoin and the crypto market.

Bitcoin price history after each Bitcoin Halving

In theory, after each Bitcoin Halving, the Bitcoin price may enter a sharp increase in price. So to verify, please look at the past of previous Bitcoin Halvings.
The first Halving took place on November 28, 2012, when Bitcoin price increased from $12 to $1,207 on November 28, 2013. The second Halving took place on July 9, 2016, Bitcoin price increased from $647 to $18,972 on December 17, 2017. Then, within a year, Bitcoin price fell from that peak to $3,716 on December 17, 2018, still about 575% higher than its pre-halving price.

The most recent Halving took place on May 11, 2020, when the Bitcoin price was at $8,821. On April 14, 2021, it escalated to a peak of $63,233, an increase of 617%. After 1 month, the price reached a record level of $49,504, an increase of 461%.
From there you can see that after past Bitcoin Halvings, Bitcoin prices grew strongly.
At the same time, you also see that after each Halving, the price of Bitcoin increases suddenly and then drops sharply. As an example in 2017-2018, Bitcoin price increased to $19,000, then decreased to $3,700. Although the following price dropped sharply, it was still higher than the price before the Halving, which was $650.

Predicting the future of Bitcoin after the 2024 halving

Based on past data and results from previous halving events, most investors believe that the value of Bitcoin will increase and possibly reach a new ATH after the fourth halving in 2024. .

Now that the 19 millionth Bitcoin was mined in April 2022, there are only about 2 million Bitcoins left unmined. Bitcoin's next halving is expected to take place on March 2, 2024, with the block reward for mining reduced to 3,125 BTC. However, the smaller the split rate of subsequent halving events, so the impact on its value will also decrease.

​However, the future value of Bitcoin depends not only on the halving but is also affected by many other factors. Positive developments of Bitcoin in 2021 such as El Salvador accepting Bitcoin as legal currency, launching the first Bitcoin ETF, Bitcoin blockchain completing the Taproot upgrade, allowing Bitcoin to run smart contracts... have creating momentum for the price increase of this currency. Additionally, by the end of March 2022, nearly 8,000 services and products accepted Bitcoin as a form of payment. As more people accept Bitcoin, demand for the currency will increase and push up the value of Bitcoin.

Summary

We have answered for you the question of what is Bitcoin Halving. Let's learn and evaluate together to make the wisest investment decisions. Wish you luck!!!