Bitcoin ‘halving’ has taken place, says crypto company

LONDON, April 20

Bitcoin, the world’s largest cryptocurrency, on Friday completed its “halving”, a phenomenon that happens roughly every four years, according to according to CoinGecko, a cryptocurrency data and analysis company.

Bitcoin was fairly stable immediately afterward, falling 0.47 per cent to $63,747.

Bitcoin enthusiasts had eagerly waited for the “halving” — a change to the cryptocurrency’s underlying technology designed to cut the rate at which new bitcoins are created. The halving was written into bitcoin’s code at its inception by pseudonymous creator Satoshi Nakamoto as a way to reduce the rate at which bitcoins are created.

Chris Gannatti, global head of research at asset manager WisdomTree, which markets bitcoin exchange-traded funds, called the halving “one of the biggest events in crypto this year”. For some crypto fans, the halving will underscore bitcoin’s value as an increasingly scarce commodity. Nakamoto capped bitcoin supply at 21 million tokens. But sceptics see it as little more than a technical change talked up by speculators to inflate the virtual currency’s price.

The operation works by halving the rewards cryptocurrency miners receive for creating new tokens, making it more expensive for them to put new bitcoins into circulation.

It follows a surge in bitcoin’s price to an all-time high of $73,803.25 in March, having spent much of 2023 slowly recovering from 2022’s dramatic plunge. On Thursday, the world’s biggest cryptocurrency was trading at $63,800.

Bitcoin and other cryptocurrencies have been supported by excitement around the US Securities and Exchange Commission’s decision in January to approve spot bitcoin exchange-traded funds, as well as expectations that central banks will cut interest rates.

Previous halvings occurred in 2012, 2016 and 2020. Some crypto fans point to price rallies that followed them as a sign that bitcoin’s next halving will boost its price, but many analysts are sceptical.

“We do not expect bitcoin price increases post halving as it has been already priced in,” JP Morgan analysts wrote this week. They expect bitcoin’s price to fall after the halving, because it is “overbought” and venture capital funding for the crypto industry has been “subdued” this year. Financial regulators have long warned that bitcoin is a high-risk asset, with limited real-world uses, although more have begun to approve bitcoin-linked trading products. — Reuters

Cutting fixed income in half

• Halving does exactly what it sounds like — it cuts that fixed income in half. And when the mining reward falls, so does the number of new bitcoins entering the market. That means the supply of coins available to satisfy demand grows more slowly
• Limited supply is one of bitcoin’s key features. Only 21 million bitcoins will ever exist, and more than 19.5 million of them have already been mined, leaving fewer than 1.5 million left to pull from.

Join Whatsapp Channel of The Tribune for latest updates.

#England #London