The Bitcoin Halving: Impact on Supply and Price

The Bitcoin Halving: Impact on Supply and Price

According to a report by www.btc-echo.de,

Bitcoin's upcoming halving is highly anticipated by many Bitcoin enthusiasts. This event occurs every four years and has a direct impact on the supply of Bitcoin. In short, supply is becoming tighter, which can also affect the BTC price.

What is Bitcoin Halving?

Halving is an event in which the reward for mining Bitcoin is halved. The first halving took place in 2012, the second in 2016 and the last halving was on May 11, 2020. In about half a year, the block reward will be reduced from 6.25 BTC to 3.125 BTC.

Why is the Bitcoin “halving” important?

The “halving” affects the supply of Bitcoin. If supply is reduced and demand for Bitcoin remains the same or increases, the Bitcoin price may rise. Because the cryptocurrency becomes more scarce with each halving, as it is limited to a maximum of 21 million BTC.

In the past, halving has reliably been followed by a Bitcoin price increase. After the first halving in 2012, the Bitcoin price rose from $12 to $1,150. After the second, the price rose from 650 US dollars to almost 20,000 US dollars in December 2017. Even after the last halving, the Bitcoin price rose from almost 8,700 US dollars in May 2020 to 69,045 US dollars on November 10, 2022.

With regard to the economic connections between supply, demand and price or exchange rate, a close connection is obvious. It is therefore quite possible that the Bitcoin price will rise again after the halving.

The upcoming Bitcoin halving is expected to lead to further shortages of the cryptocurrency. According to experts, this could lead to an increase in the price of Bitcoin, especially if demand for Bitcoin remains the same or increases.

This scarcity and historical data suggest that a renewed rise in the Bitcoin price after the next halving is by no means unrealistic. This could attract additional investors and further increase interest in cryptocurrencies overall.