On May 22, 2020, the last halving cycle for Bitcoin was completed at block 630,000. Following the typical period of 210 000 blocks, the next half of Bitcoin’s reward will take place at block 840 000.
We decided to take a closer look at how 2024’s halving will change the Bitcoin spectrum, and how it will affect when you’ll buy virtual visa card with Bitcoin in the upcoming years.
When Will the Payout for Mining Bitcoins Be Cut in Half Again?
We can make a rough estimate of when all 840,000 blocks will be mined based on the fact that one block is being mined every 9.6 minutes at the current rate.
According to forecasts, the date will be May 25th, 2024. However, the current average length between blocks was not taken into account while making this projection; rather, the average that has been observed over the course of the preceding several months was utilized.
This average takes into consideration the longer-than-10-minute block lengths that occurred in April and May of last year, when the hashrate was falling as a direct result of the Chinese government’s prohibition on cryptocurrency mining.
We may make an educated guess that the date will be May 25, 2024 if we base it on the fact that the typical blocking time over the last several months has been nine and a half minutes.
On the other hand, if we calculate the date based on the current blocked time, we obtain the date of March 26, 2024.
In light of this, we are in a position to make an informed forecast that the next halving will take place between the months of March and May in the year 2024.
There is currently no way to tell with absolute certainty when it will take place; nonetheless, it is extremely improbable that it will take place any time before March 2024 or any time after June 2024.
That is to say, we are talking about a period of time that is significantly less than three years until the next halving.
What Will Happen With the Next Halving?
When the 840,000th block is confirmed, the reward for doing so will increase from 3 Bitcoin (at the moment of the block’s validation) to 3,125 Bitcoin, on top of the transaction fees (at the time of the 1,000,000th block). At now, the amount due is 6.25 BTC.
Bitcoin’s price has increased to a new all-time high at the end of each year following each of the three halvings that have occurred thus far.
After being lowered in half for the first time in November 2012, the price increased to above $1100 by the following November.
The price was cut in half in July of 2016, and then again in December of 2017 when it dropped to over $20,000 altogether. A fresh peak of over $70,000 happened in November 2021, following a peak of over $300,000 in May of 2020.
Why Halvings Affect Price
Because Bitcoins that are given as rewards to miners are created out of thin air, it is imperative that you do not forget that the only move that can be considered monetary policy in the Bitcoin protocol is the halving of miner incentives.
The money supply of Bitcoin expands by 1.8% each year at the current rate of inflation, which equates to around 345,000 fresh new BTC being created.
After the year 2024, the total number of new Bitcoins that are generated each year will be less than 173,000, bringing Bitcoin’s yearly growth rate of the money supply to below 1%. This will occur because the supply of Bitcoin will have reached its maximum.
The rate of supply growth has been cut in half, which has resulted in a corresponding response from the price of Bitcoin.