Bitcoin has officially executed a systematic, hard-coded, and highly anticipated event known as the halving. The event, which occurs roughly every four years, cuts the Bitcoin reward that miners receive for powering the network in half, reducing the new supply of BTC entering the market.
The reward for mining a block has now been reduced from 6.25 BTC to 3.125 BTC. The halving does not directly impact the price of BTC and is not like a stock split. Instead, it showcases Bitcoin’s scarcity, its ever-decreasing rate of inflation, and its steady climb to a maximum supply of 21 million BTC.
This cycle, crypto advocates have adopted the phrase “quantitative tightening” when referring to the halving, highlighting the ways in which BTC is hard, predictable, transparent, and scarce in an era of quantitative easing, money printing, and monetary debasement. Historically, Bitcoin’s price has jumped in the months following its first three halvings.
This year, in a first, BTC surpassed its previous all-time high before the halving, reaching $73,737 on March 14th due in part to the rapid rise of Bitcoin ETFs in the US. However, in the last week, Bitcoin has retraced along with traditional assets in a de-risking event triggered by tensions between Israel and Iran. BTC is currently trading at $63,811, up 0.7% in the last 24 hours.
The halving event has defied the era of money printing and currency debasement with “quantitative tightening,” emphasizing Bitcoin’s unique properties in the financial landscape. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency, or digital assets. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/Antonov Serg/Nikelser Kate
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