Bitcoin has successfully undergone its fourth halving, reducing miners’ block subsidy rewards from 6.25 BTC to 3.125 BTC. The historic event occurred at block height 840,000, marking a significant milestone in Bitcoin’s ongoing evolution.
Halvings in the Bitcoin network occur every 210,000 blocks, approximately every four years, resulting in a 50% reduction in miners’ rewards per block. Despite this reduction, miners continue to earn additional transaction fee rewards for each block mined.
This latest halving event follows three previous occurrences in Bitcoin’s history, each contributing to a gradual reduction in the cryptocurrency’s inflation rate. With only 21 million bitcoins expected to ever exist, halving events play a crucial role in shaping Bitcoin’s supply dynamics.
Thomas Perfumo, Kraken’s Head of Strategy, highlighted the significance of this halving, noting that it marks a point where nearly 95% of all bitcoins that will ever exist have been mined. Additionally, the annualized growth of Bitcoin’s supply is set to fall to less than 1% for the first time post-April 2024.
Industry experts have offered insights into the potential impact of the halving on miners and the broader network. Binance CEO Richard Teng emphasized the resilience of the Bitcoin network in the face of such challenges, suggesting that advancements in mining technology and alternative revenue streams could mitigate any adverse effects.
Jag Kooner, Head of Derivatives at Bitfinex, acknowledged the potential for increased pressure on less efficient miners but also highlighted opportunities for innovation and efficiency improvements within the sector.
Meanwhile, Framework Ventures co-founder Michael Anderson cautioned that the full impact of the halving might not be apparent for over a year, especially considering the unique market dynamics driven by institutional participation and the introduction of U.S. spot bitcoin exchange-traded funds.
Adrian Fritz, Head of Research at 21Shares, observed a shift in miner behavior amid price surges and increased accessibility driven by ETF inflows, indicating a more bullish stance.
Charles Guillemet, CTO of Ledger, expressed optimism about the current halving cycle, citing the unprecedented demand for bitcoin and its potential to sustain miner profitability post-halving.
The completion of Bitcoin’s fourth halving underscores the cryptocurrency’s resilience and maturation as it continues to navigate through significant milestones in its journey.