Life After The Bitcoin Halving

For the mining community, the circle just got smaller. The long-awaited Bitcoin halving event has come and gone quietly. Aside from a mining pay cut, April 20th was another Sunday or National Cheddar Fries Day. 

As of December 18, 2023, the total number of bitcoins in circulation had reached 19,573,975, leaving only 1,426,025 bitcoins to be rewarded out of Nakamoto’s estimated 21 million market cap. 

The halving system keeps proving essential to keeping Bitcoin in check. Without it, mining at an increased rate or even the same steady rate will result in reaching the Bitcoin max supply of 21 million Bitcoins in a couple of years.

The first halving happened on Nov. 28, 2012, when it halved from the original 50 to 25 bitcoins.  The next halving was approximately four years later, on July 9, 2016, to 12.5 bitcoins. The next happened around the same time frame on May 11, 2020, with the block reward dropping to 6.25 bitcoins. The last occurred on April 19, 2024, when it dropped to 3.125 bitcoins.

The next halving event will likely occur in 2028 when the block reward will fall to 1.625 BTC. 

Bitcoin is a finite asset with only a limited number of coins in existence and a self-regulating encrypted inflation check. As fascinating as that is, it might not always mean good news for everybody involved.

Who is affected?

Thankfully, not everybody will be affected. Miners bear the brunt of the halving, but investors and traders, as major stakeholders, will also be affected. 

Miners will face a decrease in profit and a need for faster computing power to continue to mine as the pool gets smaller. This would mean that many small miners would be put out of business.

Other cryptocurrencies tend to follow Bitcoin’s lead. As the number one cryptocurrency in the world, sudden changes in BTC create a ripple effect, indirectly affecting other currencies. 

The halving may not drastically affect crypto-funded ventures such as merchants and businesses accepting payments in Bitcoin, crypto casinos, and offshore casinos that are becoming incredibly popular with crypto users. However, keep in mind that they are highly susceptible to price volatility, which has become synonymous with halving events. 

It’s essential to note that since gambling establishments see a significant amount of Bitcoin activity, they are likely to feel the effect of some ripples. In a piece about offshore casinos, crypto was listed as the most common payment method. You can read the full post on Techreport by Krishi Chowdary to find out more about the workings of these casinos, the top options, and how they use Bitcoin, and perhaps draw your conclusions on what the effect of the halving will be on them.

What next?

Notwithstanding the fact that the event passed without a dramatic impact on investors and markets worldwide, this doesn’t mean that the halving is insignificant. It is quite the opposite. It is likely to be a series of short-term market dynamics coupled with long-term implications. 

Bitcoin prices usually rise for several months following a halving event, although there are speculations that the market expects this halving to be different.

Regardless, there’s been a sudden influx of Bitcoin trading. A report written by Bitfinex hints that the reason for the mass buy is that investors are buying and storing the coins in anticipation of a hike in prices after the halving. 

Demand is expected to increase exponentially as the cost of mining and reduced reward forces smaller miners out of business. From previous halvings, an increase before and after the halving was predicted. True to the prediction, an unprecedented increase in the price of bitcoin was seen right before this halving.

Following the trend of the previous halving events, Bitcoin could rise by an average of sixteen percent after the halving but is also prone to sudden crashes. In the past three halvings, however, the price of Bitcoin exceeded the amount it was at the occurrence of the halving by the end of the year. Analysts predict sudden price hikes, the outcome of which could be bullish or bearish. 

According to Megan Stals, a market analyst at trading platform Stake;

“While Bitcoin’s price has historically risen before and after each halving event, it has not always been a straight line up. Following previous halvings, prices have often pulled back before reaching a new peak around 220 and 240 days later,”

Investors are eager to see how the halving will affect Bitcoin’s market performance and price, but the coin is volatile, and predictions will remain just predictions until the actual performance.

At the moment, what’s nearly certain is that investors and traders should expect a significant increase in the demand for Bitcoin and crypto-based establishments, Bitcoin casinos being one of them, should expect fluctuations that may impact revenue and earnings. 

As for the future? Right now, as with most things Bitcoin, it’s a waiting game.