2024 Bitcoin Halving
Unlocking the Future:
What it Means for Investors and the Cryptocurrency Landscape!
2024 Bitcoin Halving | Bitcoin | Cryptocurrency
CryptoJamz.com's Take:
The 2024 Bitcoin Halving Event > Based on Coinbase's SHORT Explainer!
What is the Bitcoin halving? Every four years, on the halving day, the amount of new Bitcoins created gets cut in half. This means that when Bitcoin halves, the reward given to the contributors securing the network is reduced by 50%, directly impacting the rate at which new Bitcoins are introduced into circulation. This is what we're referring to as the halving day. At the beginning of 2020, 12.5 new Bitcoins were added to the network every 10 minutes via virtual "mining." In May, that amount was halved to 6.25.
In April 2024, it will drop again to around 3.125 — and the process will continue until all 21 million coins have been mined (which estimates say should happen around the year 2140). This process, coded into the Bitcoin protocol by Satoshi Nakamoto, the creator of Bitcoin, is a way to limit the total supply of Bitcoin, increasing its scarcity.
Courtesy of Coinbase: LINK
Short Video Explainer:
Let's Get into the REAL "Meat" of this Article on the 2024 Bitcoin Halving!
Highlights:
- Supply Reduction
- Price Volatility
- Miner Economics Shift
- Increased Interest and Adoption
- Long Term Implications
About the Bitcoin Halving Event:
Before I get into the Historical Data I want to cover the MOST Basic Highlights of the Halving Event.
Really, it is Pretty Simple
Supply Reduction:
The most significant impact of the halving is the reduction in the rate at which new bitcoins are created. This occurs approximately every four years and is programmed into the Bitcoin protocol. After each halving, the reward for mining a new block is halved, leading to a decrease in the rate of supply growth. This scarcity mechanism is fundamental to Bitcoin's value proposition.
Price Volatility:
Historically, Bitcoin halving events have been associated with increased price volatility. Leading up to the halving, there is often speculation and anticipation in the market, which can drive up prices. However, once the event occurs, there can be a period of price consolidation or even correction as the market adjusts to the new supply dynamics.
Miner Economics Shift:
The halving event significantly affects the economics of Bitcoin mining. With the reduction in block rewards, miners receive half the number of bitcoins for verifying transactions. This can lead to decreased profitability for less efficient miners or those operating on older equipment. As a result, it may lead to consolidation in the mining industry, with only the most efficient operations remaining profitable.
Increased Attention and Adoption:
Bitcoin halving events tend to attract significant media attention and interest from both retail and institutional investors. This increased attention can drive greater adoption and investment in Bitcoin as an asset class. Moreover, it can serve as a catalyst for discussions about the future of money and the role of cryptocurrencies in the global financial system.
Long-Term Implications:
While the immediate impact of the halving event is often focused on price movements and miner economics, its long-term implications are equally significant. The halving reduces the inflation rate of Bitcoin, making it increasingly scarce over time. This has implications for its store of value properties and potential as a hedge against inflation. Additionally, it reinforces Bitcoin's status as a deflationary digital asset with a fixed supply, contrasting with fiat currencies subject to central bank monetary policy.
These highlights encapsulate the multifaceted effects and significance of the 2024 Bitcoin halving event on the cryptocurrency ecosystem and beyond.
Explaining the Bitcoin Halving like I was talking to a 5th Grader:
Alright, kiddo, imagine you have a big jar of candy. Every hour, you get to add 10 new candies to your jar. But, here’s the twist: every once in a while, someone sneaks into your room and says, "Hey, from now on, you can only add 5 candies per hour instead of 10." That's what we call a "halving."Now, why would someone do that? Well, they want to make sure you don't have too many candies all at once. See, if you have too many candies, they won't be as special anymore. By giving you fewer candies, they're making sure each candy stays super special and valuable.
That's pretty much what happens in the world of Bitcoin. Instead of candies, there are bitcoins, and instead of every hour, it happens roughly every four years. When the halving comes around, the number of new bitcoins that people get for helping with Bitcoin transactions gets cut in half. This helps keep Bitcoin special and valuable, just like your candies!
Explaining the Bitcoin Halving to a Cryptocurrency Enthusiast:
Think of the Bitcoin halving as a built-in feature of the Bitcoin protocol that controls its monetary supply. Every 210,000 blocks mined, which typically takes about four years, the reward that miners receive for validating and adding new transactions to the Bitcoin blockchain gets cut in half. This reduction in block rewards is what we call the "halving.
"The purpose of the halving is twofold:
Scarcity: By reducing the rate at which new bitcoins are created, the halving effectively increases Bitcoin's scarcity over time. This scarcity is an essential aspect of Bitcoin's value proposition, as it mirrors the properties of precious metals like gold, which have limited supplies.
Inflation Control: The halving also serves as a mechanism to control Bitcoin's inflation rate. With each halving event, the rate of new bitcoin issuance decreases, ultimately leading to a maximum supply of 21 million bitcoins. This predetermined supply schedule is a key feature of Bitcoin's design, ensuring that it remains immune to inflationary pressures that affect traditional fiat currencies.
For cryptocurrency enthusiasts, the halving is a significant event because it underscores Bitcoin's deflationary nature and reinforces its status as a digital store of value. It also tends to generate increased interest and speculation in the market leading up to the event, as traders and investors anticipate its potential impact on Bitcoin's price dynamics.
Overall, while the halving may seem like a technical adjustment to Bitcoin's protocol, its implications are far-reaching, influencing everything from miner economics to market sentiment and long-term investment strategies in the cryptocurrency space.
External Links that Explain the Bitcoin Halving Event:
Pre-Halving Volatility:
I have been following Juan Villaverde with Weiss Crypto for years now.
I am a Huge Fan of his Bitcoin 320 Day Cycles and his overall market analysis. He also has a partner in the Research Department, Dr. Bruce Ng. I am going to give you some excerpts from an article that Dr. Bruce wrote and then will give you a link to the entire article.
It goes into depth on the 2016 Bitcoin Halving Cycle and the 2020 Bitcoin Halving Cycle all with detailed information leading up to the halving, the corrections and the parabolic runs.
If Historical Data serves us well, everything that is happening as I am writing this article is 100% Completely Expected and holding true to the last 2 halving events. So with that said, I am relaxed and will continue to do what I do with my own trading / investing and will also "with a calm hand" write the rest of this article.
Avoid Pre-Halving Volatility with 3 Steps
By Dr. Bruce Ng On April 16, 2024
------------------------------------------------------
"Have you set your calendar yet? The next Bitcoin (BTC, “A”) halving is estimated to occur on April 20. That’s in just four days. The halving, which takes place every four years, cuts the BTC reward that miners get for validating a block on the blockchain. In effect, it cuts the production of new BTC in half. That’s why it’s usually a bullish event — a cut in supply could drive prices higher.And it’s why we’re eagerly anticipating this halving, as demand for BTC has skyrocketed thanks to institutional interest from the new spot exchange-traded funds.But that’s the big picture. In the near term, the halving tends to stir up a whirlpool of volatility.
And even seasoned traders can lose their perspective when caught up in the storm. The unending speculation from talking heads rarely helps, either. So today, I want to take the resources we have — the market’s past performance leading up to and following a halving along with recent price action — to see if we can’t get a feel for how this volatility could shake out. My goal? To help you fight the FUD — fear, uncertainty and doubt — that the volatility will bring. So, let’s get started with the two most recent halving events. First up is the 2016 halving. Below is a chart of the price action throughout 2016, with the event itself marked by the vertical red bar …"
2016 Bitcoin Halving Chart:
And here is a chart of BTC’s price over 2020,
with that year’s halving also marked by a red bar.
As you can see, the price action before and after each halving is very similar. In fact, they reveal a set pattern:
That’s a fair bit of volatility as price trends change like the wind! And we’re already feeling some of that in this go-around. Take a look at the recent BTC price action …
- First there is a rally before the halving.
- Then, prices dump as we close in on the halving.
- Price then recovers nearly back to pre-halving ATH on the day of the halving itself.
- This is followed by sideways price action for a few months.
- And the final parabolic rally in the fall.
Read the Entire Article (Click the Link Below to READ the entire Post)
My Conclusion:
The article has a TON of great information and advice.
I am not as CONSERVATIVE as Dr. Ng is suggesting investors should be. I have learned over the years that we all have our own styles, risk aversions (or lack of them) and "At the End of the Day" (argggh, hate that saying) each of us has to manage our own trades and investments and we are ultimately responsible for our own investment decisions. (None of what I write is intended to be financial advice in any way)
Simply Sharing my own Experiences!
My Conclusion on the Bitcoin Halving Cycles: (Past, Present and Future)
For me I take it all in, but then look at the charts and the current market dynamics and have a little different perspective. This is my 3rd Halving Event. The first one for me (2016) was just a BLUR. A seasoned investor, but a newb to cryptocurrency. The 2nd one, (2020) I was READY and LOADED for BEAR. (Literally, but Bearish Traders). I did well with $BTC.X & $ETH.X and got super lucky with Solana (got in Solana in December of 2020 by sheer "chance") and had been adding Polygon Networks / Matic for awhile.
I had a pretty broad BAG of the "Usual Suspects". Avalanche, Wrapped LUNA, XRP, XLM, DOGE and about another dozen REGULARS. Nothing that was SUPER HIDDEN or OFF the Radar.
And I did Great. Sold a TON of Solana at close to the TOP ($240ish) and held on to some since my cost basis was SO Low. I did hold on to Matic too long. (Lesson Learned) But it ended up being a super profitable cycle and greater than the PROFITS the experience I gained was invaluable.
Because of that process, I developed a completely different strategy going into this Bull Cycle.
Was Smart and Aware Enough to know to ADD Solana on the SEC Scare Dip and then put my STOCK Investing / Trading on the back burner in September 2023 and got Super Serious about FINDING a Ton of Generation 2 & 3 Type Cryptos before anybody was thinking about ALT Season Accumulation.
And keep in Mind, some of this was happening as far back as 2022 and then in January 2023 I found Kaspa and bought at .0058. Bought a TON. But in DOLLARS then only about $1100 Worth. I had read some articles on BlockDAG and went on the "Hidden Gem" Hunt. KASPA Bagged Cheap!
Fast Forward back to Fall 2023... Started going Wide and Deep. Adding on the Cheap.
$AIOZ.X: Added a BIG BAG at .012 (High of .93 in March 2024) Not Bad. (Still holding 80%)
$PNG.X: A Ton on the Cheap and HOLDING a FULL "FREE" Position. (4X Profit to Holding from Trading)
In total I amassed about 75 +/- Assets that I am holding as of today.
If you want my Tradingview Watchlist, simply email me
and in the SUBJECT LINE add: "Send me a Link to Your Tradingview Watchlist"
You will NEED Tradingview to ACCESS the "Shared Link"
Beyond the above, I employed a unique "3 Bucket" per Category Trading Strategy that I termed:
My "TOP to BOTTOM Method" and also employed an AGGRESSIVE "OPEN LANE Strategy".
These allowed me to 6X my Portfolio from Fall to Early 2024.
Beyond that I was using $BITO, $BITX and $BITI (Hedge) to GROW one of my Traditional Market Accounts and at one point in March I was UP over 7,000% solely trading CALL Options DIRECTIONALLY on Bitcoin.
BITO is the Proshares Bitcoin Futures Trading Strategy ETF. During Periods of almost 100% Bullishness, I would ADD or Switch to BITX which is the same ETF but with 2X Leverage. Effectively doubling the POWER of the BITO Options. *** FYI: They do have the SHORT Versions of BITO in BITI. And also a 2X Leverage BITI in SBIT. I will be employing this STRATEGY for the duration (meaning FOREVER) regardless of Bitcoin Phase (Bullish or Bearish). Now keep in mind, it is NOT without Risks if you are NOT a Seasoned Options Trader.
But with the proper training and approach it is a piece of cake.
I will be publishing a FULL Online Training Course on trading BITO and BITX Options in the near future.
I will initially be OFFERING the Course of a SUPER LOW Cost of $9.99.
Why so CHEAP?
I want to PUT the knowledge in as many hands as possible, simply to help crypto investors.
I use the Funds from my BITO/BITX Options Trading as a Constant Source of "DRY POWDER" to fuel the funds for more options, as well as buying FREE Shares of Coinbase and Bitcoin ETF Shares.
I prefer BTCO (Invesco Bitcoin ETF) and ARKB (Ark Bitcoin ETF) for 2 Reasons:
- Roughly .001 Ratio to Bitcoin Price
- Low FEES.
And for those that do Trade In and Out of the Bitcoin ETFs and have a smaller account under the $25K Pattern Day Trading (PDT) Threshold, you can BUY One today and SELL (Scalp) and BUY the other one BACK without incurring a PDT Day Trade Penalty.
FYI: You can do the same with OPTIONS, simply by closing one trade and simply picking a strike that is .50 higher or lower. And keep the same EXPIRE Date. Just a few little tips and tricks for small account traders.
A quick note back on the OPTIONS, I have people ask me about ENTRIES.
Anybody that follows me on StockTwits knows that I am very tuned into "FINE" Entries and Exits.
I use an entire cadre' of tradingview indicators to guide me there. I even write a handful of my own algo/indicators. (Tip: ChatGPT is Great at writing Pine Script)
Lastly, if you are a FREE Subscriber to my NEWSLETTER you will automatically get a DISCOUNT CODE to get the OPTIONS Trading Course for $9.99 and I will be adding another BONUS to allow you to add ALL of the Trading Strategies I mentioned about for $9.99 (All of it for under $20 Bucks) "NO BRAINER"
I will also be releasing a "Finding Crypto Hidden Gems" Research & Identification Training!
Email Me @ info@cryptojamz.com if you are interested in getting notified of that training.
If you would like to be part of our PREMIUM "Shared Services" Private Group you can Learn More about that after signing up for the FREE NEWSLETTER.
~
Don't MISS a Single Article published by CryptoJamz
Subscribe to our NEWSLETTER and get Notifications and Links Sent Straight to your INBOX!
Subscribe to Our Newsletter
Get Access to our FREE "Hidden Gem" Research, Trading Tools, News, Tips and more.
Popular Cryptocurrency Traders & Investors Resources:
Coinbase Learn
Binance Academy
Coindesk
CryptoBubbles.net
CoinTelegraph
DefiLama / Base Ecosystem
Join CryptoJamz Team 10
Our Premium "SHARED SERVICES" Plan
Like have a Team of Research Analysts and Experts Digging for your NEW Crypto Hidden Gems!
#cryptojamz #cryptohiddengems #cryptocurrency #bitcoin #coinbase #base #ethereum #solana #rwa #ai
Share to X (Twitter)