11 years ago, a major event transformed the cryptocurrency world: the first halving of Bitcoin. November 28, 2012 marked the beginning of a new era for BTC, significantly influencing its value and appeal to investors. This phenomenon, which occurs every 4 years, involves halving the amount of newly created Bitcoin.
Bitcoin’s first halving celebrates its 11th anniversary
11 years ago, on November 28, 2012, Bitcoin (BTC) experienced a key event in its existence: its first halving. This milestone, crucial in the crypto ecosystem, has always marked one of the starting points of bull markets for the cryptocurrency sector.
Every 10 minutes, a new block is added to the Bitcoin blockchain, confirming new transactions. To ensure that this task is carried out efficiently, the network rewards those who have mined the block with new BTC. However, if the total supply of Bitcoin continued to grow at this rate, the currency’s scarcity and attractiveness to investors would be compromised.
This is where halving comes in: this event halves the quantity of newly created BTC every 210,000 blocks, i.e. approximately every 4 years. Initially, the blockchain produced 50 new Bitcoins per block. After the first halving, this number fell to 25, then to 12.5 in July 2016, and finally to 6.25 since May 2020.
The halving is the reason why Bitcoin is such a unique asset, characterized by its limited supply and scarcity. Satoshi Nakamoto, Bitcoin’s creator, aimed to offer an alternative to inflationary fiat currencies, which are gradually losing their value, often at a rate of around 2% per year.
The impact of halvings on the Bitcoin price
Following the first halving, the Bitcoin price recorded a significant rise from around $10 to $1,200 a year later, in November 2013. After the 2nd halving, it experienced another sharp rise, climbing from $670 in July 2016 to $20,000 in December 2017.
Bitcoin’s price evolution and halvings
We are now about 140 days away from the next halving, which should reduce the creation of new BTC from 6.25 to 3.125 per block. This recurrence suggests that the next halving could also trigger a new bull market, potentially propelling Bitcoin to new heights.
However, the crypto community remains divided on this issue. While some believe that reducing the issuance of BTC will increase its scarcity and thus boost its price, others believe that the effect of halving on price is already priced in by investors, and that if there is any impact, it will be visible long before the event itself.
One indisputable aspect of halving is its impact on miners’ revenues. The halving of new Bitcoin creation means that miners will only be remunerated with 3.125 BTC after the next halving, a significant reduction in their income.
