Bitcoin has officially completed a planned and highly anticipated event called the halving. This event, which occurs approximately every four years, reduces the reward that miners receive for maintaining the Bitcoin network by half, thus decreasing the new supply of BTC entering the market. The reward for mining a block has been reduced from 6.25 BTC to 3.125 BTC.
It’s important to note that the halving does not directly impact the price of BTC and should not be compared to a stock split. Instead, it highlights Bitcoin’s scarcity, its decreasing rate of inflation, and its journey towards a maximum supply of 21 million BTC. In light of the current era of quantitative easing, money printing, and monetary debasement, crypto advocates have adopted the term “quantitative tightening” to describe the halving. This emphasizes the ways in which Bitcoin stands out as a hard, predictable, transparent, and scarce asset.
Interestingly, Bitcoin’s price has historically increased in the months following its previous three halvings. This year, BTC reached a new all-time high of $73,737 before the halving, a milestone achieved partly due to the rapid rise of Bitcoin ETFs in the US. However, in the past week, Bitcoin has experienced a significant price correction alongside traditional assets, triggered by tensions between Israel and Iran. As of now, BTC is trading at $63,811, with a 0.7% increase in the last 24 hours.
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