Welcome to Bitcoin’s Fifth Epoch
Following the network’s programmed reduction in newly issued Bitcoin, a new era of digital scarcity has been ushered in. Like clockwork on Friday, the reward that miners earn for validating Bitcoin transactions was slashed in half for the fourth time since the blockchain’s launch.
Bitcoin’s so-called halving occurred at just after 8 pm ET on Friday. As a result, miners will earn 3.125 BTC per block created until some time likely in 2028. It’s part of miners’ dues for solving cryptographic puzzles that help keep Bitcoin’s network secure, until that’s halved again well into the 22nd century.
Routine as it may be, Bitcoin’s halving—which is triggered by just seven lines of code from Bitcoin’s pseudonymous creator, Satoshi Nakamoto—is core to the asset’s qualities. As Galaxy Digital Analyst Gabe Parker explained on Twitter (aka X), the halving is “the backbone of Bitcoin’s transparent, predictable monetary policy and makes Bitcoin a provably scarce asset.”
Bitcoin’s Price Predictions
As for Bitcoin’s price, what comes next is anybody’s guess. But historically, Bitcoin’s price has gained positive momentum in the wake of each halving—though typically not right away.
- Bitcoin’s “most explosive gains” typically occur 180 days after the halving.
- On average, Bitcoin’s price has risen 427% from 30 days before the halving to 180 days after.
- Bitcoin jumped 116% in 2020 from $6,800 to $14,850.
It’s important to note that Bitcoin’s third halving occurred in a different macroeconomic landscape that could impact how the asset performs post-halving.
Market Analysis and Potential Impact
Despite higher interest rates, Bitcoin set a new all-time high price in March amid Wall Street’s embrace of spot Bitcoin ETFs.
With major institutional players now capable of taking exposure through these vehicles, Bitcoin’s response to the upcoming halving may not necessarily mirror its performance in prior cycles.
The volatility that marked previous halvings could be less so, due to the increased experience that Bitcoin miners have in navigating the event.
Miner Preparedness and Future Prospects
The prospect of less distress among miners was shared by industry experts, highlighting their preparation for the halving event.
Miners have had plenty of time to prepare and showcase how far their overall sophistication has come.
The halving necessitates a refinement in operations, which could be seen as bullish in the long term by fostering a more resilient and efficient mining landscape.
Hot Take: The Future of Bitcoin’s Halving
Welcome to Bitcoin’s fifth epoch. Following the network’s programmed reduction in newly issued Bitcoin, a new era of digital scarcity has been ushered in. Like clockwork on Friday, the reward that miners earn for validating Bitcoin transactions was slashed in half for the fourth time since the blockchain’s launch.
Routine as it may be, Bitcoin’s halving, triggered by just seven lines of code from Bitcoin’s pseudonymous creator, Satoshi Nakamoto, is core to the asset’s qualities. The halving is the backbone of Bitcoin’s transparent, predictable monetary policy, making Bitcoin a provably scarce asset.
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