What to Expect for Bitcoin Value and Network Security
Bitcoin mining rewards are about to be cut in half for miners in a planned event called the “halving.” This anti-inflationary move is predicted to occur on or around April 17, 2024.
Although this is not the first time such a halving event has occurred, the crypto world is poised to enter the unknown as recent price increases and a somewhat crowded mining landscape bring mystery and uncertainty. In the history of cryptocurrency.
The first Bitcoin exchange in the United States, as well as a new all-time high Bitcoin (BTC) price of $73,679 on March 13, 2024, are just days away from the halving. It's anyone's guess whether the price will crash, spin or hold after the mid-April event – there are no guarantees. But if the past is an indicator of the future, it's possible to study past half-baked events to determine how this year's will play out.
Historical half price
Bitcoin block number one was mined on January 3, 2009 with a reward of 50 BTC. The first mining event took place on November 28, 2012, and reduced the reward per block to 25 BTC. At the time, BTC was sitting at $12.20.
Fast Fact: If someone had spent $100 on BTC in the first half day, they would have lost 8.9 BTC. Then, if they can hold their coins until March 13, 2024, when BTC reaches its most recent peak, the value of a $100 investment will be $655,743.
After the first half, the price of BTC increased from $12.20 to around $1,000 by the end of 2023.
The second stripping incident occurred in It's July 9, 2016. This brings the reward for mining a block to 12.5 BTC. At that time, Bitcoin was valued at around $640. In July 2017, it increased to $2,550.
May 11, 2020 brought the third and most recent stripping event. Bitcoin mining rewards fell to 6.25 BTC per block and were trading around $8,750 at the time. Within a year, Bitcoin reached an all-time high of nearly $62,000.
halved in 2024
Following this year's halving in mid-April, both the price of BTC and speculation surrounding the event reached an all-time high. Analysts predict everything from $75,000 to $250,000 or more within a year after the halving.
History shows that, after halving events, the price of BTC typically rises in the following year.
It is important to note that forecasts regarding market movements are just that – forecasts. No one knows if Bitcoin will crash, moon or stabilize after the halving. However, history seems to favor the brave, as all-time highs tend to follow semi-events.
Bitcoin network security
Beyond concerns about cost, there are unanswered questions surrounding network security in a post-halo world.
At the end of the day, there are security risks that can occur in halving, as small miners may be forced to leave the site. With rewards slated to drop by 50%, those miners operating on the break-even edge may want to sell out of concern outside the reward spectrum or exit without help.
Intermittent mining availability can cause ripples across the entire Bitcoin network that reduce hashrate and overall security.
But, on the other end of the spectrum, past halving events have had no discernible impact on overall network security, and many analysts predict smooth sailing for the network itself.
