Bitcoin (BTC) has successfully completed its fourth halving event as it reached its 840,000th block, resulting in a halving of mining rewards. The crypto community eagerly awaits the impact on Bitcoin’s price, with some predicting it could reach as high as $250,000. Currently, Bitcoin is priced at $63,960, showing a 1.16% increase in the past 24 hours according to CoinMarketCap data.
Following the halving, Bitcoin miners will now receive 3.125 BTC per mined block, a reduction from the previous 6.25 BTC. This halving process is programmed into the Bitcoin protocol and occurs every 210,000 blocks, or approximately every four years. The previous halvings took place in 2012, 2016, and 2020, resulting in significant decreases in mining rewards over time. The first halving in 2012 reduced the mining block reward from 50 to 25 BTC.
The main purpose of the Bitcoin halving is to manage scarcity and control the inflationary supply of Bitcoin. This mechanism was integrated into the code by Bitcoin’s pseudonymous founder, Satoshi Nakamoto. By halving mining rewards, the creation of new Bitcoin is slowed down. This process will continue until around 2140 when all Bitcoin is expected to be mined.
Major Bitcoin miners have prepared for this event. Marathon Digital recently announced its acquisition of a 200-megawatt Bitcoin mining facility in Texas for $87.3 million. Similarly, in December 2023, competitor Bitcoin mining firm Riot Platforms purchased 66,560 mining rigs from manufacturer MicroBT, marking one of the largest expansions of hash rate in the company’s history.
Despite short-term predictions of price volatility in the crypto community, there is optimism about Bitcoin’s long-term potential. Billionaire investor Tim Draper believes that the halving will drive Bitcoin’s price to ” $250,000 or more,” a forecast he has consistently made, especially in 2022. Herbert Sim, also known as “Bitcoin Man,” suggests that other factors, such as the approval of the Bitcoin ETF in Hong Kong, will also have a significant impact on Bitcoin’s price. He speculates that the big banks in China will start buying Bitcoin themselves, further influencing the price.
In related news, hip hop stars have shown a growing interest in cryptocurrency, with many embracing Bitcoin as a means of investment.