So, Bitcoin Halving Is Done. What Happened and Whats Next? (06/2024)

Despite the notable event, its unclear whether it will lead to a sharp bitcoin price rise as it has in the past. The bitcoin halving may best be viewed as a symbolic event more than anything else, as it illustrates bitcoins value proposition on the backdrop of relatively high inflation rates. Its likely that miners may be affected more than anyone else due to the loss of revenue, though some miners are exploring other avenues to make up for that shortfall.

What happened on April 19?

The highly-anticipated fourth iteration of the bitcoin halving occurred a little after 8:09 p.m. Eastern on Friday. Bitcoin traded flat in the immediate aftermath of the halving, holding steady around $63,000.

After the halving, the rate of issuance of new bitcoin as well as the rewards for successful bitcoin miners are cut in half. There can only be 21 million bitcoin, and fewer new tokens entering circulation could impact bitcoin prices. Thats why the halving is watched closely by miners and investors alike.

In addition to the subsidy, miners also collect any fees associated with the transactions in the block.

What Happens Next?

In the past, halvings have led to new all-time highs for the bitcoin price in the months following the events. However, this time has been different, as the bitcoin price has already reached a new all-time in the months prior to the halving.

Much of the recent rally was driven by the spot bitcoin exchange-traded funds (ETF), perhaps an indication the demand created by that market may have a greater impact on bitcoin prices than halving events.

According to Kraken Head of Strategy Thomas Perfumo, there is a degree of additional symbolism associated with this halving in terms of the illustration of bitcoins apolitical, unwavering monetary policy at a time when many people around the world are having questions about their own currencies.

However, analysts at JPMorgan and Deutsche Bank said that the impact of this halving was mostly baked into the current bitcoin prices and there isnt likely to be a large upward movement in the price in its aftermath.

According to these reports, the near-term effects of the halving may be limited to the bitcoin mining sector, where consolidation could occur as overall hashrate declines due to decreased profitability.

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