The Bitcoin Halving Event Could Be Today – What Does It Mean?

Tonight, Bitcoin halving is predicted to occur at around 9PM EST. This is a significant event in the cryptocurrency world, with many curious to see how the value of the coin will be impacted.

With crypto still being largely new and volatile ground, investors and tech enthusiasts are watching closely, and it will be interesting to see if any price difference will spur a quick selling spree. But what does it actually mean?

What Does Bitcoin Halving Mean?

The blockchain that Bitcoin is built on works by paying miners that verify transactions with more Bitcoin. This reward is usually provided in exchange for the energy used to verify each transaction within the blockchain’s web.

Halving is the process that reduces this reward by 50%. According to wider sources, this halving is programmed into Bitcoin’s network to occur every 210,000 transactions, happening approximately once every four years. The idea behind this is to ensure Bitcoin can be distributed more evenly over a longer period.

Whilst this sounds like frustrating news, it could be argued that with the huge rise in value that Bitcoin has seen over the last few years, the real value that miners receive isn’t as dramatic as it sounds. But how could it affect prices?

What Are The Effects of Halving?

When a halving happens, it reduces the number of new Bitcoins entering the market. As with most assets, if supply goes down but demand stays the same, this could lead to an increase in value.

Historically, halvings have been the start of some of the biggest price increases in the crypto’s history. However as we well know, Bitcoin doesn’t always follow a pattern and jury is out as to how this event will affect it.

Beyond the market price, halving could also de-incentivise many miners, potentially pushing some of them out or encouraging them to invest in more tech to increase their yield.

In truth however, it’s difficult to predict what could happen. Let’s see what the experts think…

What Do The Experts Think?

Samer Hasn, Market Analyst at XS.com

 
“The crypto market returns to the declines today after yesterday’s recovery, while Bitcoin had touched temporarily their lowest level in a month and a half when it reached 59,573 dollars earlier this morning.

“This is the weak performance of the crypto market today with the approaching of the halving event of Bitcoin late this evening.

“Historically, halving was a bullish factor for bitcoin in the long run, but that was not necessarily in the short term. While the harsh losses suffered by buyers may be enough to temporarily keep them away from the scene, after liquidating more than $ 2.3 billion of long positions of crypto futures from Friday until yesterday, according to CoinGlass.

“Bitcoin has already enjoyed about 200% from last September until mid -March, when it exceeded $ 73,000 for the first time. Therefore, bulls will need more incentives to enter again and it is not surprising to see a more negative atmosphere in the market in the coming days.

“If we go back to start of this April, we have witnessed the halving event for Bitcoin Cash (BCH), the bitcoin hard fork, which has enjoyed 20% since the third of April and reached a level of $ 720 before it declined and lost 38% of this peak to the level of $ 480.

“In the coming days, the most important thing that the markets will search for, as usual, is more flows towards the spot bitcoin ETFs, which recorded net outflows throughout the previous five sessions, while the net assets of the ETFs are near the lowest levels in a month.

“The risk appetite in the crypto market is also affected by the developments of the macro economy and constantly escalating geopolitical tensions. As negative sentiment increases around the path of the interest rate in the United States, with hope gradually, the possibility of cutting rates during the second half, with the acceleration of inflation. Moreover, the atmosphere of the regional war in the Middle East and the concerns about the possibility of the conflict in control.”
 

Nigel Green, CEO of deVere Group

 
“Despite it being one of the biggest moments in crypto, the halving is likely not to move the needle too much in terms of values. Indeed, it’s likely to be a major price non-event.

​“Investors, traders, and speculators, priced-in the halving months ago. As a result, a significant portion of the positive economic impact was experienced previously, driving up prices to fresh all-time highs last month.

“The effects of the halving are not confined to the day it happens. Instead, they unfold gradually over time, influencing market dynamics – and, as history teaches us, driving the price upwards – in the months and years following the event. The reduction in the rate of new supply leads to a more pronounced scarcity, reinforcing Bitcoin’s status as a store of value asset.

​“This long-term narrative often plays a more significant role in shaping investor sentiment and price trends than the immediate impact of the halving itself.

“The Bitcoin halving is a landmark moment but the actual event will likely be a ‘flop’ for prices on the day. The huge significance lies in the positive impact it will have in the longer term on the price of the world’s biggest digital asset.”
 

Chief Strategy Officer for RDX Works, Adam Simmons.

 
“The Bitcoin halving sparks important conversations around network scalability and escalating transaction fees. With the scalability challenges we’ve experienced since the conception of Bitcoin, we cannot help but reflect on its intended role as a viable, alternative monetary system – and where it has fallen short in this regard. Despite this, Bitcoin undeniably stands as a testament to its decentralised vision and has flourished as an asset class.
The halving is bound to fortify Bitcoin’s status as a major asset, lending further credibility to the cryptocurrency sphere.

“Aside from possible market movements and widespread adoption of cryptocurrencies, the anticipation surrounding the Bitcoin halving is also expected to drive increased interest and attention to the blockchain and Web3 industries.

“With the surge of next-generation layer-1 networks, both end-users and developers are becoming better equipped with the necessary tools to build and use intuitive, secure, and powerful Web3 applications. This marks a significant shift towards realising the Web3 vision, unlike previous Bitcoin halving cycles where scalability issues hindered progress. The convergence of technological advancements and growing interest in the industry hints at a promising future, where the vision of Web3 can finally evolve and thrive in a way that was previously unattainable. ”
 

Conclusion

Today’s halving is a big moment for Bitcoin, and no doubt millions will be watching to see the impact.

While it may mean future price increases, the immediate effects for investors and users are unclear. As with any financial event, only time will tell the full impact of this halving on the cryptocurrency world. We’ll certainly be keeping a close eye…