What is Bitcoin Halving?
As the name suggests, Bitcoin halving refers to the 50% cut down on Bitcoin production in order to avoid inflation. The event has taken place roughly every four years since Bitcoinâs inauguration in 2012 and last occurred in May 2020.
The Million dollar question is, âWill Bitcoinâs value spiral in 2021 as a result of the previous halving?â In order to understand the predictions and forecast of Bitcoin halving in 2021, itâs essential that we go over the fundamentals of Bitcoin halving, when is Bitcoin halving done, why it happens to begin with, and an overview of its past occurrences.
What is the purpose of Bitcoin halving?
Bitcoin is built around a fixed supply of 21 million coins altogether, and in order to maintain the currencyâs value, Bitcoin halving occurs. In other words, the coins supply is cut to half roughly every four years or after every 210â000 Bitcoins are mined, so it doesnât lose its value due to increased supply.
If Bitcoin miners were able to constantly mine Bitcoins and they were infinite, the currency would become subject to inflation and lose its worth. So, for a coin to be sustainable without a regulating authority, it must be scarce or have a limited supply.
Similarly, if Bitcoins supply was unlimited and the effort required to mine Bitcoin would be stagnant, Bitcoin miners would soon lose the incentive or motivation to continue mining Bitcoins.
Key takeaways
- Bitcoin halving, and crypto halving in general, refers to a 50% cut down on digital currency supply.
- Bitcoin halving occurs roughly every four years or after every 210â000 Bitcoins have been mined.
- The purpose of halving Bitcoin supply is to maintain its value and boost its demand. In other words, it occurs to avoid inflation.
- The crypto halving event attracts investors to purchase Bitcoins.
- Â Bitcoin halving acts as an incentive for Bitcoin miners to continue mining Bitcoins until the last one is mined, as it is expected to further rise in value.
How does Bitcoin halving work?
Roughly every four years, when the rewards given upon mining a Bitcoin are cut to half, the cryptocurrencyâs value appears to increase rapidly. The reasoning behind this is supply and demand. Every time Bitcoinâs halving date comes near, people begin to purchase or mine Bitcoins hoping to make profit once the halving event occurs. So when Bitcoins supply decreases, its demand seeâs a spike.
Crypto halving has allowed Bitcoin to gain value by attracting investors, which led to a higher acceptance rate. Hundreds of cryptocurrencies have emerged ever since the inauguration of Bitcoin, albeit none come even close to Bitcoin in terms of acceptance, growth, and value.
Bitcoin halving dates and their impacts
The first Bitcoin halving â 28th November 2012
The first Bitcoin halving dates back to 28th November 2012. Surprisingly the event did not show any impact during or right after it took place, but instead, the value of the coin began to rise steadily at the beginning of 2013.
Followed by fluctuations in its price, by autumn of 2013, the value of Bitcoin was above 1100 USD. However, it continued to fall down to 152 USD by 14th January. Finally, roughly nine months before the next halving event, there was a steady rise in the coinâs value again.
To sum up the Bitcoin halving chart for 2012, the BTC price at the start of 2012âs halving event was 12$. One hundred days following the halving event, Bitcoins value had risen to 42$. And just about a year later, Bitcoins value was recorded at 964$. The impact of the first halving was immense and spread great awareness regarding Bitcoin. The price rise also sparked the interest of investors.
The second Bitcoin halving â 9th July 2016
After the success of the first Bitcoin halving, the second Bitcoin halving back in July 2016 was much anticipated. The rising acceptance and high expectations that people had from Bitcoin led to a drastic rise in its value a month and a half before the halving event took place.
Although fluctuations in price are bound to happen, so soon after the halving event there was a decline in Bitcoins value. Thankfully it wasnât long before the value of the coin peaked again, and Bitcoin reached its all-time high of 19â700 USD. This spike in Bitcoins value was roughly a year and a half after 2017âs halving event took place.
2017 was a great year for cryptocurrencies, as people started to accept them much more, and many began investing in Bitcoins alongside other cryptocurrencies. However, one cannot tell precisely how much crypto halving has to do with the sudden fame. It certainly did play a role, but many external factors led to Bitcoins popularity as well.
To sum up the second halvingâs impact, the value of Bitcoin was 663$ at the start of the halving event of 2016, 609$ after 100 days, and 2550$ after a year. This shows that the impact of crypto halving is higher after a while rather than immediately after.
The third Bitcoin halving â 11th May 2020
The last Bitcoin halving event took place on 11th May 2020. As seen in the previous two halving events, there werenât any immediate changes in Bitcoinâs price after the halving occurred. However, the cost of Bitcoin in the last halving dates appeared to increase at the beginning of the year, and that wasnât the case this time.
Sadly, the Covidâ19 pandemic that began in March 2020 had a negative impact on Bitcoinâs value. Though the cryptocurrency has begun to increase in value once again, it is impossible to depict the future direction or fluctuations. Who knows, history might repeat itself and Bitcoins price might again spike in the near future.
Here at Zeply, our purpose is to allow you to purchase, sell, and store your Bitcoins with our user-friendly crypto exchange. Not only do we offer Bitcoin transactions with 0% fees, but we also give our users valuable insight and guidance to support them in their crypto trading journey.
Forecast and predictions of Bitcoins halving 2023
The past year has been a rollercoaster due to the global pandemic that led to economic uncertainty, countrywide lockdowns, travel restrictions, and whatnot. The effects of the pandemic could be seen in Bitcoins value as well. However, the price has started to see a rise again ever since October 2020. So many investors and companies decided to put short term volatility aside and began focusing on the long run.
Similarly, analysts are viewing Bitcoins fall in price as short term volatility as well. According to them, the cost of Bitcoin could touch 100â000$ by next year, and the future for the cryptocurrency appears bright despite the global pandemicâs drastic effects.
So, should I invest in Bitcoin?
Itâs important to understand that nobody can predict the exact value of Bitcoin in the near or far future. Analysts use past economic events to draw forecasts and predict the coins future value, but the currency remains volatile. As for now, the next Bitcoin halving countdown has begun and people are already predicting its affects or considering investing.
Even though the likelihood of Bitcoinâs value further increasing after the recent halving event is relatively high, itâs not 100% certain. Here at Zeply, we aim to provide our uses with the guidance and insight needed while successfully trading Bitcoins. Our website is designed to enable easy Bitcoin transactions and secure storage of digital currency.
If youâre looking to jump on the bandwagon and invest in Bitcoin in the hope of making profits in the future, our platform aims to make your Bitcoin trading experience as smooth as ever.
Final thoughts on Bitcoin halving
The thought of investing in Bitcoin can be overwhelming; after all, the currency is highly volatile. One cannot simply predict what the future will be, however the likelihood of Bitcoin gaining further acceptance and increasing in worth is pretty high. Bitcoin has seen immense success in the last decade, which is why analysts are hopeful in regards to its future.
To make the bitcoin transactions convenient for you, we at Zeply are focused on making Bitcoin purchasing, selling, and storing as simple as possible.
With our simple account opening process, free of charge Bitcoin transactions, and incredibly user-friendly website, trading and storing Bitcoins could not have been more accessible.
