Bitcoin Halving
phaidenbauer • 19 Apr 2024 •
I’m not sure who on here follows the cryptocurrency market, but Bitcoin will undergo a change tonight. It’s not a massive change technologically speaking, as there were several halvings before.
Halving means the emitted bitcoin rate per mined block drops by 50%. This time, from 6.25 BTC per Block down to 3.125. Interestingly, the market seems to have priced in that change already, as the BTC/USD price has been going sideways for a few days now.
But, on the non-technological side, there is a different, major, difference to the past halvings: institutional investors in the US. Don’t get me wrong, institutional investors are there basically since Bitcoin exists, but Black Rock (and others) created an “easy” way for investors to flood money into the market. And they have been going in with large amounts. Such large amounts that if they keep continuing at a high pace, we will see a supply shock (huge buy demand but “nobody” selling, or in this case, not enough bitcoin being mined) of BTC in the near future.
I planned to write a Newsletter Issue (https://financial-idiot.blog/) for that topic, but I’ll wait until the halving goes through. I won’t be up to “watch it happen”, but I think the first thing tomorrow morning will be looking into the charts before going on a paramedic duty for the rest of the day.
Comments
Well, although there is a maximum of 21 Million BTC, it will take a while until they are all mined. Especially as the halvings continue over the years. We will reach the end of all mined in 2140, it seems (according to Wikipedia https://en.wikipedia.org/wiki/Bitcoin#Mining), after that miners will still continue to receive transaction fees. So as long as enough people keep sending bitcoin around, they will be incentivised.
Once all bitcoin has been mined, what is the incentive for people to keep hashing or whatever it is they do to verify transactions on the blockchain?