- There are just 500 blocks left until the Bitcoin halving.
- Sweeping changes are predicted for the mining industry.
- Retail investors welcome the benefits of the halving.
Bitcoin’s preprogrammed halvings are a core tenet of its design, serving as an in-built deflationary mechanism that halves the number of new coins entering circulation. This approach is intended to maintain the scarcity of Bitcoin over time, which many believe adds upward pressure to the BTC price over the long term.
With the Bitcoin network hitting the 839,500th block milestone, there are now just 500 blocks remaining until the halving kicks in, but what should you expect as the event draws nearer?
Bitcoin Halving to Shake Up Mining Sector
With just 500 blocks left before the Bitcoin halving, the cryptocurrency community is buzzing with anticipation. The fourth halving is scheduled to occur on April 19 at 23:57 UTC, but this is changeable depending on the block production rate.
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Bitcoin halvings occur every 210,000 blocks, approximately once every four years. After the current event, mining block rewards will be cut in half, from 6.25 BTC to 3.125 BTC, plus the block’s transaction fees. A more thorough explanation of halvings, including an analysis of past price performance and the hype surrounding them, can be found here.
The halving is a significant event in the crypto calendar and is closely watched due to Bitcoin’s outsized influence on the broader cryptocurrency ecosystem.
According to Andrew O’Neill, managing director at S&P Global’s Digital Assets Research Lab, the impending halving is poised to shake up the mining industry. O’Neill told DailyCoin that he expects to see a consolidation of miners, as the reduced block rewards make it unprofitable for smaller, less efficient operators to continue.
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O’Neill added that dwindling block rewards incentivize miners to seek additional revenue through transaction fees, potentially allowing Inscriptions/Ordinals and BRC20 tokens to gain more prominence post-halving.
Mike Alfred, crypto investor, echoed O’Neill’s sentiment, describing the halving as a “double edged sword” that will leave marginal miners by the wayside. Alfred predicted that the high barrier to entry would prevent new competitors from entering the market, catalyzing the value of existing mining operations “as the cycle progresses and BTC goes parabolic.”
While the Bitcoin mining industry may face changes due to the halving, retail investors are particularly interested in the potential deflationary benefits it brings.
Preserving Purchasing Power
Bitcoin’s halving mechanism reduces the number of new coins entering circulation, benefiting retail investors through deflation and the impact this has on retaining purchasing power over time. A recent Coinbase ad cleverly captured this concept by showing the increasing amount of pizza one Bitcoin could buy over successive halving cycles.
In 2012, at the time of the first halving, one Bitcoin purchased only one pizza. By the time of the second halving in 2016, that same Bitcoin could buy several pizzas. After the 2020 halving, the visual morphs into a towering mountain of pizza boxes, representing the incredible purchasing power one Bitcoin had accrued. By 2024, the pizza boxes were raining down.
The powerful visuals employed in the ad were well-received, hitting home the message that Bitcoin is designed “to get you more over time, not less.”
On the Flipside
- While past halvings have typically led to price increases in the long term, the short-term effects have been more unpredictable.
- Consolidation of miners adds centralization risk.
- Halvings in isolation do not guarantee continued growth or price appreciation for Bitcoin.
Why This Matters
With the next Bitcoin halving approaching, the cryptocurrency community eagerly anticipates its impact, especially in fulfilling the store of value during turbulent times.
Find out about the campaign to time the Bitcoin halving to take place on April 20 here:
Bitcoin Miners Urged to Slow Production for 4/20 Halving
Bitcoin dominance dips following Iran-Israel tensions. Read more here:
Bitcoin Dominance Wanes in the Wake of Crypto Market Turmoil
