By May 2020, it would be the fourth year since the cryptocurrency market had a Bitcoin halving, which occurs once every 210,000 blocks until the maximum supply of 21 million has been generated by the network.
The halving in May – when the number of blocks hits 630,000 – is likely to significantly change the value of Bitcoin. Experts also say that it would increase demand for the cryptocurrency by further restricting supply.
The expected increase in demand is already being reflected by the number of people searching for ‘Bitcoin Halving’ in January. It grew more almost 100 percent in the new year. The growing Google search is likely to have some impact on the price of the cryptocurrency.
Traders were exchanging one bitcoin for $8,773 on the Coindesk index on Monday. On the Luno exchange in Nigeria, one bitcoin exchanged hands for N3.1 million, representing growth from the previous week.
A Bitcoin halving refers to a process of reducing the rate at which new cryptocurrency units are generated. For instance, the halving in May would see the block reward fall from 12.5 to 6.25 bitcoins. Essentially, halving ensures that miners have to spend more time to mine each of the cryptocurrency. Invariably, the miners would likely push up the price of the cryptocurrency to compensate for the extra effort.
Previous Bitcoin Halvings took place in November 2012 and July 2016. At the time of the first halving event, the price of Bitcoin was $12.31. The following year after the first halving in 2012, the price began to climb dramatically, reaching a new high of over $1,100 in 2013. However, the price crashed down to the $220 and $240 range where it remained for many years until the next halving.
Also at the time of the second halving event, the price was $650.63. It would be recalled that the event in 2016 preceded the market’s epic run in 2017. The price of bitcoin hit an all-time high of over $19,000 by December 2017.
There will only ever be 32 bitcoin halving events, according to Binance. As soon as the 32 events are completed in 2140, there will be no more halvings and there will also be no more Bitcoin created as the maximum supply would have been reached.
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