Bitcoin's halving is an event that many crypto fans look forward to. This event occurs about every four years and affects the supply of Bitcoin. In short: the supply becomes scarcer. And so far, this always affects the Bitcoin price as well.

What is Bitcoin's halving?

Halving is an event in which the reward for mining Bitcoin is halved. It takes place every 210,000 blocks, which is about every four years. The first halving took place in 2012, when the reward was halved from 50 bitcoins to 25 bitcoins. The second halving took place in 2016, when the reward was halved from 25 bitcoins to 12.5 bitcoins. The last halving occurred on May 11, 2020, when the block reward was reduced from 12.5 BTC to 6.25 BTC. According to Nicehash, which counts the blocks, so to speak, the reward will be halved from the current 6.25 BTC to 3.125 BTC just under a year.

Why is the " halving " of Bitcoin important?

The " halving " affects the supply of Bitcoin. If the supply decreases while the demand for Bitcoin remains the same or increases, the Bitcoin price will rise. This is because the cryptocurrency becomes scarcer with each halving, as supply shrinks. This is because supply is limited to a maximum of 21 million BTC, after which no new bitcoins are added.

In the past, a halving was always followed sooner or later by a rise in the Bitcoin exchange rate. For example, the first halving in 2012 was followed by a rise from $12 to $1,150. After the second halving, the rate rose from $650 to nearly $20,000 in December 2017, and during the last halving, Bitcoin rose from nearly $8,700 in May 2020 to $69,045 on Nov. 10, 2022.

It is not possible to say with certainty whether this is a causal relationship or merely a correlation, i.e. a more or less random event. In terms of economic relationships between supply, demand, price and exchange rate, a close correlation is a logical conclusion. But how much the price will rise? Has the bullrun already begun by then and will altcoins move with it? We will find out next year.

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