Bitcoin halving 2024: What should traders know

Curious about the price of Bitcoin (BTC) in 2024? Then you can't afford to ignore the impact of this year's scheduled Bitcoin halving, which will drastically affect the supply of Bitcoin relative to demand and should, therefore, also impact prices. Because this isn't the first Bitcoin halving event, we have some idea of what to expect when the 2024 halving occurs, and traders should prepare accordingly in order to maximise profits.

What is Bitcoin halving?

Halving, sometimes jokingly called 'halvening' in crypto community slang, is an integral part of Bitcoin. It's a planned feature from the very creation of the world's first cryptocurrency by the person or group known only as Satoshi Nakamoto.

As a decentralised digital currency, Bitcoin is generated via a process called 'mining', which involves powerful computers solving complex mathematical problems through the proof-of-work (PoW) process. This process verifies transactions and adds them to the blockchain, a digital ledger that serves as an immutable record of computing activity. As a reward for helping to run and secure the network, successful miners receive a predetermined amount of Bitcoin once they solve a block.

However, rewards for miners don't stay the same over time. In order to control Bitcoin's inflation rate, the block rewards are programmed to reduce by 50% at certain intervals. This reduction in mining rewards serves to diminish the incentive to mine further, enhancing Bitcoin's scarcity and elevating the stock-to-flow ratio. This scarcity, in turn, contributes to the perceived value and potential appreciation of Bitcoin over time, especially with increasing demand.

When is the Bitcoin halving in 2024?

The schedule for Bitcoin halving isn't set at particular calendar dates but rather when a certain number of blocks have been mined. Since its inception in 2009, Bitcoin has undergone three halving events: in 2012, 2016 and 2020. The fourth is scheduled for 2024 at a block height of 840,000. The subsequent halving is projected to occur in 2028. The timing of these events depends on completing 210,000 blocks, with each block taking about 10 minutes to be added to the Bitcoin network. This results in a halving schedule approximately every four years.

Bitcoin's capped supply policy that limits it to 21 million BTC distinguishes it from fiat currencies and makes it similar to a limited resource like gold. At some point in time — estimated to be around the year 2140 — the last Bitcoin will be mined. Before then, every halving event reminds crypto users and traders that the supply is limited, making their Bitcoin more valuable to those who want to buy.

The next Bitcoin halving event is currently anticipated to occur in April 2024, although the exact date has not yet been determined. Watch this space: we'll update you on the precise day as we get closer to April. In the meantime, it's important to be prepared well in advance. Here's what you need to know.

Impact of the 2024 Bitcoin halving on miners

Mining Bitcoin is resource-intensive, and halving the rewards may hurt miners' profitability, measured in dollars per terahash (TH) per second. The 2024 halving is poised to impact the introduction of new BTC into the market by reducing rewards from 6.25 to 3.125 BTC.

This shift will pressure miners to enhance their efficiency to maintain profitability. Consequently, we may see the emergence of new technological advancements in mining hardware or organisational operations that focus on energy efficiency and power. If you're invested in Bitcoin mining operations, it will be important to monitor profitably very closely.

Impact of halving on Bitcoin's price

Historically, Bitcoin's halving events have led to scarcity in the cryptocurrency market, putting upward pressure on prices and triggering bull runs. Predictions can be dramatic, with some analysts suggesting that Bitcoin's price could reach $250,000 around the 2024 halving event. 

That sounds like a lot, but it's based on past performance figures. Over the past three halving cycles, spanning the year before and after each halving, Bitcoin has exhibited substantial growth, approximately 30,000% in 2012, 786% in 2016, and 712% in 2020. If this pattern persists, the price could potentially reach $220,000 by 2025.

Regardless of the exact amount, Bitcoin prices tend to go up in the months before the halving event and remain relatively stable during the occurrence. The primary surge in value typically unfolds within the six months to a year following the halving as the market adjusts to the new level of scarcity, Bitcoin's deflationary nature attracts investors seeking to safeguard their capital in a world where traditional currencies face inflation. Given how much the world economy has been hit by inflation in the years following the COVID-19 pandemic, Bitcoin as an investment should be even more attractive in 2024.

How to profit from the Bitcoin halving in 2024

Past halving events have followed a pattern of accumulation, a bull run, and a subsequent bear run. As such, traders are advised to watch prices closely to time their moves for maximum profitability, i.e., to buy before prices rise during the bull run and to take profit by selling before the correction.

2024 could be a pivotal year for Bitcoin, with optimistic price predictions based on the increasing backing from institutional investors, the introduction of spot Bitcoin ETFs, and the anticipation surrounding the imminent halving event. For investors and traders looking to profit from the potential price fluctuations of Bitcoin, Ethereum (ETH), and other digital assets like altcoins, tokenised stocks, and crypto indices, StormGain offers an ideal platform that caters to both beginners and seasoned traders.

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