Bitcoin is approaching its fourth halving event, or the fourth protocol-designed 50% decline in block rewards that occurs every 210,000 blocks, or about every four years.
Simply put, a Bitcoin halving is when the rewards for mining Bitcoin are halved after each set of 210,000 blocks is mined.
A Bitcoin halving restricts the supply of new coins by lowering the rewards for mining. The next halving is to take place in 2024.
The forthcoming Bitcoin (BTC) halving event has sparked an online debate. Many outsiders are wondering what cryptocurrency is and why it is so important.
Those discussing it are ecstatic that the cryptocurrency community only has around two years before this event, leaving many outsiders wondering what it is and why it is so important.
When Bitcoin reaches 840,000 blocks on May 4, 2024, the second halving event is expected. We are halfway between the third and fourth halving occurrences, with 744 days till it occurs.
Halving events are important because they reduce the motivation for miners to mine Bitcoin, which includes confirming new transactions and creating new currencies.
What is going to happen on May 4, 2024?
The miner earns a fee of 6.25 BTC for each Bitcoin block mined in the present era, which follows the third halving event on May 11, 2020.
Based on a daily average of 144 blocks, about 900 BTC is now issued and awarded per day.
Every block during the fourth halving event, this reward will be halved and reduced to 3.125 BTC. Every day, around 450 BTC will be released in rewards if the daily average of blocks remains the same.
What will be the impact of the Bitcoin Fourth Halving Event?
On April 1, after the 19 millionth Bitcoin block, ‘730002,’ was mined, it became clear that only 2 million Bitcoins remained out of the 21 million limits. When supply is reduced, demand rises, implying that prices may rise as well.
Bitcoin halving events in the past have been followed by steady and considerable price increases over time, culminating in a one-and-a-half-year price increase. Bitcoin investors will be thrilled if the same thing happens with the next one.
For Bitcoin investors, we can look back in time to see how the 2024 halving would affect the price of Bitcoin.
Past Bitcoin halvings have resulted in significant price increases. Following the halving in 2012, the price of Bitcoin jumped from $12 to $1213 the following year.
The second 2016 halved price was $647, then it rose to $19.800 the following year before falling to $3,276 the following year, still 506 percent higher than the halved price.
Bitcoin’s most recent halving occurred in May of 2020 when the price was $8,787, and it reached over $68,000 in 2021.