ViaBTC | Does Bitcoin’s Fourth Halving in 2024 Signal the Next Bull Market?
The world’s largest Bitcoin news platform, Bitcoin Magazine, tweeted on July 24 that the network’s block height had hit 800,000. Now that 800,000 blocks had been mined, the halving, a major BTC event that happens every four years, is only less than 40,000 blocks away and will probably take place in late April 2024.
For the crypto industry, every BTC halving marks a feast, especially during the first three halving cycles of Bitcoin, where the market witnessed astonishing price surges by dozens of times. Despite short-term corrections, the market consistently rebounded later, leading to long-term bullish trends.
Price Trends After BTC Halvings
The first BTC halving happened on November 28, 2012, with BTC priced at around $12. Within less than six months, the figure surged to $153, increasing more than tenfold.
The second halving occurred on July 9, 2016, when the BTC price plummeted to $650. However, by December 2017, it reached an all-time high of about $19,700, a staggering thirty-fold increase.
The third halving took place on May 12, 2020, when BTC was quoted at around $10,000. By November 2021, the price reached a record high of nearly $69,000, an increase of over six times.
Following the halving in 2020, Bitcoin went from a niche product confined to the geek community to a mainstream financial asset, attracting widespread attention.
What Makes BTC Halving the Catalyst of Price Surges?
The rationale behind the BTC halving lies in its underlying coding. Although Bitcoin creator Satoshi Nakamoto did not elaborate on why Bitcoin must be halved every four years, many speculate that it’s because the initial reward of 50 BTC was meant to incentivize miners to join the network and facilitate fast market circulation.
Unlimited issuance of BTC would gradually erode its purchasing power, undermining its status as a store of value and medium of exchange. Therefore, Nakamoto introduced the halving mechanism, which stipulates that the block reward is halved every 210,000 blocks.
In a normal market scenario, a reduction in supply coupled with stable demand often leads to price growth. Lowering the block reward slows down the influx of new BTC into the market, and decreasing the BTC inflation rate helps maintain the coin’s long-term value and stability.
Litecoin, another long-established PoW project, is about to undergo its third halving this August, which will allow investors to validate the positive impact of reduced supply and stable demand on market prices. Stay tuned to the LTC halving if you are a crypto user.
Transactions Fees are Taking a Larger Share in Miners’ Revenue
The boom of BRC-20 in early May brought handsome transaction fees to BTC miners, which had exceeded the 6.25 BTC block reward at one point. Data from ViaWallet Explorer shows that on May 8, BTC transaction fees reached 683 BTC, accounting for 42.59% of the total daily revenue of Bitcoin miners, a new high in nearly three years.
With BTC halving, the block reward will continue to diminish until it approaches zero, and it’s estimated that by the year 2140, each block in the Bitcoin network will only carry a negligible reward of one satoshi (the smallest unit of Bitcoin). By then, transaction fees will become the primary incentive for miners to keep running their operations and the only source of mining revenue.
The adoption of BRC-20 has pushed up the transaction volume, which is undoubtedly a much-welcomed development for miners. The block reward will continue to halve until it approaches zero, but miners will survive as long as there is demand for transactions. Whether BRC-20 succeeds or fails, this new path of development will surely receive more attention as the BTC halving continues.
It’s unclear whether the halving will trigger the next crypto bull. While halving events tend to catalyze bullish trends, they might not lead to market upswings without other positive factors. Nonetheless, some experts remain optimistic. For instance, research firm Fundstrat Global Advisors suggests that as BlackRock’s ETFs drive up demand, BTC may surge to $180,000 before halving next year.
About ViaBTC
ViaBTC, founded in May 2016, has provided professional, efficient, safe and stable cryptocurrency mining services for over one million users in 130+ countries/regions around the world, with a cumulative mining output value of tens of billions of dollars. As a world’s top all-inclusive mining pool, it provides mining services for dozens of mainstream cryptocurrencies including BTC, LTC, KAS, etc. Backed by the one-stop, all-inclusive services spanning the mining pool, the exchange, and the wallet, ViaBTC is committed to offering global users more abundant supporting tools, stabler and more efficient mining services, and better product experience.
