How Bitcoin is Evolving Beyond a Store of Value

Few events impact Bitcoin ( CRYPTO: BTC) as significantly as its halvings, which happen approximately every four years and are central to Bitcoin’s monetary structure.

Contenuto del Post:

1 Since its inception in 2009, Bitcoin’s What Are Bitcoin Halvings and Why Are They Important?
- 1.1 This process will continue until 2140, when the final Bitcoin will be mined.
- 1.2 What Could Happen Before the Next Halving?

Since its inception in 2009, Bitcoin’s What Are Bitcoin Halvings and Why Are They Important?

Every 10 minutes or so, a new “block” is added to the Bitcoin blockchain. A Bitcoin halving occurs every 210,000 blocks, which is roughly every four years. During a halving, the reward that miners receive for processing transactions and securing the network is halved, reducing the rate at which new Bitcoin is introduced into circulation.

When Bitcoin launched in 2009, the block reward was 50 BTC. The first halving in 2012 reduced it to 25 BTC, followed by a reduction to 12.5 BTC in 2016, and then to 6.25 BTC in 2020. This year’s halving decreased the reward to 3.125 BTC per block, reducing Bitcoin’s annual inflation rate to below 1%.

This process will continue until 2140, when the final Bitcoin will be mined.

The halving is a key feature of Bitcoin’s protocol, designed to manage inflation and cap the total supply at 21 million Bitcoins.

By slowing the creation of new Bitcoin, halvings put upward pressure on its price, provided that demand remains steady or increases.

Historically, this deflationary aspect has significantly contributed to Bitcoin’s price growth by creating scarcity
in the market.

What Could Happen Before the Next Halving?

As we look ahead to the next halving, expected in 2028, the market currently shows a bullish trend with potential for further growth.

Cryptocurrency analyst Benjamin Cowen has examined Bitcoin’s price movements over the last three cycles and suggests that the current market still has potential to rise.—where mining rewards are halved—have consistently created noticeable patterns.

Although past performance isn’t a guarantee of future results, the predictable timing of these halvings offers valuable insights for investors.

With the next halving not expected until 2028, examining these patterns could help anticipate potential market trends in the meantime.