Since the start of the year, Bitcoin’s prices are already up by over 80 percent. And because of this latest development, many investors are excited for the future of the flagship cryptocurrency. In just a year from now, Bitcoin will approach a major technical event. And according to numerous analysts, it could have a catalytic effect on the cryptocurrency’s growth.
Around April 2024, the reigning cryptocurrency by market cap is expected to experience a halving event. In anticipation of the halving, its prices have been increasing over the past couple of weeks. Moreover, it’s likely that the Federal Reserve will stop interest rate hikes as a way to alleviate pressures on the banking sector.
Bitcoin Values Up By Over 80 Percent
Since the start of the year, Bitcoin’s prices have increased by more than 80 percent. As of today, a single BTC token was worth $30,000, based on data by CoinGecko. According to the vice president of corporate development ay Luno, Vijay Ayyar, the recent jump above the $30,000 mark is a major indicator that something big is coming.
The VP of the England-based crypto exchange explained that Bitcoin’s growth in a time of economic uncertainty and bank failure is quite phenomenal. It indicates that the cyclical ‘bottom’ is forming. He further elaborated that this usually happens a year before the token’s halving event, the next of which is schedule for April 2024.
What Happens In The Halving Event
The halving event takes place whenever 210,000 new blocks are added to the Bitcoin blockchain. This happens about every four years, and it halves the rewards Bitcoin miners earn for mining new tokens. That means their earnings go down by 50 percent, which effectively lowers the number of new tokens being introduced in the market.
As of now, miners are rewarded 6.25 BTC for each block they successfully add to the blockchain. After the halving event, the reward will be reduced to 3.125 tokens.
Proponents of the famous cryptocurrency explain that this will help increase the price as the tokens become scarce. The maximum number of Bitcoin tokens to ever exist is 21 million. The halving mechnism is designed so that the reward of mining new tokens eventually goes down to zero.
Who Are Miners
These miners are volunteers with advanced equipment used to mine new tokens and validate transactions on the blockchain.
Since an average computer can’t handle the complex computational puzzles that have to be solved, miners have to invest in robust hardware. This gives them the necessary computer power to solve difficult puzzles and secure the blockchain.
The process is what keeps the network secure and prevents attacks from bad actors.