[ad_1]
© Reuters
Investing.com – Supply growth is expected to fall below 1% for the first time ever next month as the “halving event” begins, underscoring the popular cryptocurrency’s scarcity premium and likely fueling the current bull market just as institutional investors join the race to capture it popular cryptocurrency to “hodl”.
“Bitcoin supply growth is currently about 1.7% and will fall to just under 1% for the first time in Bitcoin’s history,” said the director of education and governance initiatives at the next halving, which will “at some point on April 17,” the Web3 Foundation said in an interview with Investing.com’s Yasin Ebrahim on Thursday.
Halving events, which occur every four years, halve the amount of Bitcoin produced by miners on the Bitcoin blockchain or network – hence “halving.”
But what exactly is being halved?
The only way to produce Bitcoin is to produce blocks for the Bitcoin network. Each block currently produces 6.25 Bitcoin, which are distributed to miners responsible for validating transactions stored in blocks on the blockchain. However, at the next halving, this reward will be halved to 3,125 BTC, slowing the rate at which new Bitcoins are minted and increasing their scarcity and price.
About 19.6 million Bitcoin, about 93.59%, of the total 21 million Bitcoin have already been mined. “In the future, miners will fight for a much, much smaller output of Bitcoin in each block,” Laboon said, adding that there is still a lot of work to be done before the last block is mined, which is expected sometime in 2140.
Since its launch in 2009, there have been three halving events that have reduced Bitcoin’s supply growth from 25% to just under 2% currently.
Halving history seems to be smiling on Bitcoin bulls
During the last four-year halving cycle, Bitcoin’s price has followed a clear trajectory in three main periods: pre-halving, halving, and post-halving.
In the previous cycle in May 2020, Bitcoin was trading at around $9,000 before the halving, but after the halving on May 11, 2020, it began a bull run to an all-time high of $68,982.20 in November 2021 before turning into a significant Correction came.
The 18-month period between Bitcoin halving and peak price is consistent with historical data from previous halving cycles. With the current BTC price peak expected to be reached in the third week of October 2025, at a time when institutional investors are entering the fray following the launch of a spot Bitcoin ETF in January this year, many are optimistic that this will be the case There is still a lot of room left in the current bull market.
U.S.-based spot Bitcoin ETFs have accumulated over $60 billion in assets under management as of March 16, data from Coinglass showed, including Blackrock’s iShares Bitcoin Trust (NASDAQ:) and Fidelity’s Fidelity Wise Origin Bitcoin Fund ( NYSE: ) is leading the charge.
Bitcoin is evolving. . .
With the last block mined and 21 million Bitcoin in circulation, many are worried about what the future holds for the Bitcoin blockchain, as miners may have less incentive to continue maintaining the network without the reward of producing new ones to get blocks.
But the use cases for Bitcoin – beyond simply transferring Bitcoin from one user to another – are beginning to emerge, increasing activity on the network and associated transaction fees, which could prove much more lucrative than the reward miners are seeking New blocks receive the distribution.
“We have actually seen in the last year or so that there have been other uses of the Bitcoin network besides just transferring Bitcoin, most notably atomic numbers,” which can be thought of as “super NTFs (non-fungible tokens).” said Laboon.
“Over time, this fee market will replace the new issuance of Bitcoin to ensure that miners continue to be paid to do the work of maintaining security on the network,” he added.
Laboon added that the increasing creation of Layer 2 technologies, or off-chain networks – built on top of Layer 1 blockchains like Bitcoin – is a “very big growth area” for Bitcoin because it “enables” people to do so. . Leverage the security of Bitcoin to run more complicated programs that have sometimes been run on other blockchains.”
[ad_2]
Source link
