Last Saturday night, the Bitcoin block reward was cut in half for the fourth time. Since then, the BTC network has issued only 3.125 BTC instead of the previous 6.25 BTC per block (about every 10 minutes). In the short term, nothing has happened. No wonder: after all, the prediction of the price increase associated with the supply shortage is regularly priced in. The Halving is an event that no longer surprises anyone. Nevertheless, price movements are to be expected in the medium term, as you can read in several reports.

When does the Halving Effect occur?

The real economic impact of the Halving does not reach the market immediately after the event. It takes some time before the lower inflation is really noticeable. Moreover, the actual measurable effect on the economic reality of the network decreases with each Halving. Indeed, the step from 25 BTC per block to 12.5 BTC per block (Halving two) is larger than the current step from 6.25 to 3.125 BTC. Moreover, more than 93 percent of all bitcoins that have ever existed have already been mined.

Nevertheless, Bitcoin, with an inflation rate of 0.8 percent, is the world's hardest monetary asset since the Halving. Even gold, with an annual growth rate of about two percent, has an inflation rate more than twice as high. This gives reason for optimism. Especially considering that in the past it did not really take off until six to 12 months after the Halving. "Bitcoin's average performance only accelerated in the three months following previous Halvingen," writes crypto fund Hashdex in a report.

By the way: the scarcity of Bitcoin will only really manifest itself in the medium term. By 2032, 99 percent of all BTC will have been mined. After that, there will be hardly any additional supply for about 100 years - there has never been a harder, scarcer type of money in human history. So it is possible that BTC will increase in value in the medium term. For now, however, we must be patient.

In addition to the exchange rate, the Halving also has a major impact on many other areas of the BTC ecosystem. These include mining, transaction fees and the Runes protocol.