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The cryptocurrency market experienced a pivotal moment this Friday night: the expected Bitcoin halving took place, which is expected to have a strong impact on prices in the coming days and weeks.
The halving is a key event that occurs every four years and means that the reward that miners receive for validating transactions on the Bitcoin network is halved, thereby reducing the supply of the cryptocurrency.
In this way, the halving increases the scarcity of Bitcoin. Thus, as there is less supply, it is likely that – if the market registers a growing demand for the token – an increase in the price may occur.
How much are Bitcoin and Ethereum trading after the halving?
Bitcoin, the most popular cryptocurrency in the world, traded higher this Friday, April 19, amid cautious investor optimism about the halving.
However, this Saturday the trend was reversed and, after the event, BTC traded upwards this Saturday with a price of US$65,317, an advance of 1.78% in the last day.
Meanwhile, Ethereum (ETH), the second most important crypto, is sold for US$3,135, which represents an increase of 2.1% in the last 24 hours.
The Bitcoin halving has arrived and there is strong expectation about what may happen to the price.
What can happen now with the price of Bitcoin
In the history of Bitcoin, three halvings have already been recorded, in 2012, 2016 and 2020. And after each of them, the cryptocurrency set new all-time high prices in the first six months afterwards.
Now, most analysts expect the halving to result in a new price rise, although some warn that it could cause a period of short-term volatility.
History “shows that there may be significant volatility around these events,” which would pose a “challenge” for short-term investors, according to a report from digital asset platform Bit2Me.
“We will have to give the market time to settle and see its reaction in the medium term,” said Mireya Fernández, head of the Bitpanda investment platform, who warned that the effects of this halving will probably not be fully appreciated. immediate due to the greater maturity of Bitcoin.
Why this year’s Halving is “unique”
In this context, this year’s halving is unique as it comes amid a series of other significant events in the Bitcoin and crypto ecosystem in general. In addition to the ETF advance, which has sparked institutional interest and participation, another important trend in crypto today is the rise of Layer 2 and DeFi activity on the Bitcoin network, driven by the popularity of the Ordinals protocol and Bitcoin inscriptions.
“Although the points above seem to offer an optimistic outlook for BTC and the crypto market in general, it is important that investors, especially newcomers to the crypto space, manage their expectations, and always make informed decisions. Immediate changes in prices are not guaranteed. price in the wake of the halving, and its fundamental importance will manifest itself in longer trends in value, liquidity, adoption and the position and acceptance of crypto as an asset,” they noted from the Binance exchange.
They added: “Beyond the price of BTC, the halving may have auspicious long-term effects across the ecosystem, with benefits spilling over to other assets and projects and spurring infrastructure construction and product innovation across the board.” space”.
The halving drastically reduced the generation of new bitcoins.
When did the previous halvings occur?
First Halving – November 28, 2012
On halving day, the price of Bitcoin was approximately $12. Six months later, around May 28, 2013, the price had increased significantly to about $130, showing a substantial increase.
Second Halving – July 9, 2016
The price of Bitcoin was around $660 on halving day. Around January 9, 2017, the price increased to about $900, indicating considerable growth in value during those six months.
Third Halving – May 11, 2020
The price of Bitcoin was approximately $8,600 on halving day and rose to over $15,700 six months later, around November 11, 2020.
