Category: Halving news

With Bitcoin finally completing its fourth-year halving cycle, many users are aggressively competing for halving blocks, paying exorbitant amounts of fees to mine a single block. 

Bitcoin Mining Pool Pays Over $2.4 Million In Block Fees

Earlier today, the 840,000th block was added to the Bitcoin blockchain, triggering the onslaught of the highly anticipated halving event. While the price of BTC did not witness a dramatic change following the halving, transaction fees spiked to unprecedented highs. 

Amidst the massive competition, a mining pool identified as ViaBTC had successfully mined the 840,000th Bitcoin block. Cumulatively, BTC users had spent a staggering $37.7 BTC in mining fees, equivalent to $2.4 million, recording the highest fee ever paid for a Bitcoin block. 

According to reports from mempool, after ViaBTC had produced the 840,000th block, the protocol had initiated an automated reduction of miners’ reward by half, from 6.25 BTC to 3.125 BTC per block. In addition to the fees, ViaBTC had received a total payout of 40.7 BTC, valued at approximately $2.6 million, for mining the historic block.  

While it may seem that Bitcoin miners had thrown caution to the wind by spending over $2.4 million on a single block, the 840,000th block had a major significance within the cryptocurrency space. The historic Bitcoin block is said to hold the first Satoshis, ‘sats,’ the smallest units of BTC following the halving. 

There are several of these “epic sats,” that appear after the halving event, coveted as a rare collector’s item among cryptocurrency enthusiasts. Some even speculate that these Bitcoin fragments could be potentially worth millions of dollars. 

Including the hype surrounding these fragmented BTC, much of the competition for the Bitcoin blocks, following the halving has been attributed to the new Runes Protocol which launched at the same time as the Bitcoin halving. 

Degens Rush To Secure Infamous Rune Tokens

The Runes Protocol, created by Casey Rodamor, a Bitcoin developer, has sent shockwaves through the cryptocurrency community, as degens are avidly competing to etch and mint tokens directly on the Bitcoin network. 

While mining pools were mining new Bitcoin blocks, degens had paid over 78.6 BTC valued at $4.95 million to mint the rarest Runes. This exponential surge in fees has been an unprecedented event, highlighting the increased adoption and participation of the Bitcoin network.

According to reports from Ord.io, a Rune labeled as ‘Decentralized’ was acquired for a fee of 7.99 BTC, equivalent to $510,760. While another titled ‘Dog-Go-To-The-Moon’ was obtained for a fee of 6.73 BTC, worth approximately $429,831.

Leonidas, protocol developer and host of the groundbreaking Ordinals, a system for numbering “epic sats,” has declared the Runes Protocol a remarkable success as degens have “single-handedly offset the drop in miner rewards from the halving.” He concluded that Runes have significantly impacted Bitcoin’s security budget, potentially playing a major role in ensuring the network’s sustainability.

The long-awaited fourth Bitcoin halving finally occurred after BTC posted its 840,000th block. This event is significant as it is expected to have several implications for the Bitcoin ecosystem and the crypto market going forward. 

What To Expect Following The Bitcoin Halving

The Bitcoin halving slashed miners’ rewards from 6.25 BTC to 3.125 BTC for each block mined. This means that Bitcoin miners are set to earn a reduced income of 450 BTC instead of the 900 BTC they earned before the fourth halving. This development is expected to have a dire effect on their operations, as NewsBTC reported that they could lose a whopping $10 billion following the halving.  

While the effects of the halving are not so pleasant for BTC miners, the halving is deemed necessary for the growth of the Bitcoin ecosystem. It makes Bitcoin (BTC) deflationary by reducing the rate at which more tokens come into circulation. This could make the flagship crypto more scarce and ultimately drive up its value, as it has done in the past three halvings. 

In anticipation of history repeating itself, crypto analysts and experts have made several predictions about how high Bitcoin could rise this time post-halving. So far, the most bullish price prediction remains by Samson Mow, the CEO of Jan3 and Bitcoiner, who predicts that the flagship crypto could rise to $1 million this year. 

He added that this unprecedented price surge was possible considering that BTC’s demand is expected to continue outpacing the supply, with more institutional investors recently getting on board through the Spot Bitcoin ETFs. The imbalance between Bitcoin’s supply and demand is also why crypto analyst MacronautBTC believes Bitcoin could rise to $237,000. 

Billionaire Tim Draper also agrees that Bitcoin could attain such heights based on his prediction that the flagship crypto will hit $250,000 in 2025. 

Implications On The Broader Crypto Market

Crypto analyst Michaël van de Poppe recently predicted a narrative shift post-halving. He expects Bitcoin to take months to consolidate while altcoins significantly move to the upside during this period. This is plausible, considering Bitcoin doesn’t experience that parabolic price surge until about six months after the halving. 

During this period, altcoins like XRP and Cardano (ADA), which have underperformed up until now, will be closely monitored as investors wait to see if they will show any sign of bullish momentum in them. Ethereum (ETH) will also be the focus of many in the crypto community as they watch how the second-largest crypto token by market cap will perform while Bitcoin (BTC) consolidates. 

Interestingly, Van de Poppe expects the narrative to shift to Ethereum and projects in the Decentralized Physical Infrastructure Networks (DePIN) and Real World Assets (RWA) sector. Therefore, such projects are also worth keeping an eye on. 

The 2024 Bitcoin halving is only two days away, and there are already varying expectations of what might happen to the BTC price once the event is completed. One way to get an idea of how it could play out for the Bitcoin price, though, is through historical data and how the cryptocurrency has performed at times like these.

Bitcoin Price Trends For Previous Halvings

There have been three halvings so far since Bitcoin was first launched in 2009 and with each one, Bitcoin has demonstrated various reactions to the event. The first halving took place on November 28, 2012, the second happened on July 9, 2016, and the last one was on May 11, 2020.

For the purpose of this report, only the last two halving will be referenced given that adoption had began to climb at the time that these two happened. The 2016 halving happened when Bitcoin was trading around $650, but in the weeks following the halving, the BTC price would drop another 30%, reaching as low as $460 before climbing back up once again.

Then, during the 2020 halving, the BTC price was trending just under $10,000, and following the halving, would see a drop in price as well. However, this drop was not as significant as the 2016 drop, with the BTC price only falling around 15% during this time.

This has formed quite a trend with the halving, where the Bitcoin price falls after the event, which is expected to be bullish. Therefore, if this trend continues, then BTC could see a sharp drop in price despite the expectation that the halving will be bullish for price.

However, it is important to consider that subsequent halvings have seen a lower post-halving crash compared to their predecessors. So, if this holds this year, Bitcoin could still be looking at a crash but to a much lesser degree. For example, the 2020 post-halving crash was half of the 2016 post-halving crash, so holding this trend, the crash this time around could only be an around 7-8% crash.

BTC Deviates From Established Halving Trends

While the historical data does suggest where Bitcoin could be headed following the crash, it is also important to note that the digital asset has deviated from a number of pre-halving trends. One of these deviations is the fact that the Bitcoin price hit a new all-time high before the halving, something that has never happened before. This could suggest that there will be a complete deviation from these established trends, meaning that a crash may not follow the halving after all.

Another deviation is that the few weeks leading up to the last two Bitcoin halvings have been green. However, in 2024, the last three weeks leading up to the halving have been red as the BTC price has been in decline. This also lends credence to the fact that there could also be a deviation from its post-halving trends.

One thing to keep in mind though, is that the crypto market has always been uncertain and Bitcoin has a habit of doing what no one expected. The Bitcoin Fear & Greed Index has seen a pull back from the extreme greed territory, but it continues to remain in greed, which means investors are still bullish. In this case, if Bitcoin were to do the opposite of what is expected, then it could follow the established trend and crash back down.

Cryptocurrency exchange and trading platform, Bybit has released a new report highlighting the impacts of the upcoming Bitcoin halving event on the supply dynamics of Bitcoin within exchanges in the crypto space. The crypto firm has provided valuable insights on how the halving event would enhance scarcity and considerably influence the price of BTC. 

Exchanges Set To Face Bitcoin Supply Crunch

On Tuesday, April 16, Bybit published a new report, providing a detailed analysis of the Bitcoin halving event set to take place this month. The crypto firm disclosed that the Bitcoin reserves within the world’s crypto exchanges have been depleting at a rapid pace, leaving only nine months of BTC supply left on exchanges. 

For a clearer perspective, Bybit explains that with just two million Bitcoin left in its total supply, a daily influx of $500 million into Spot Bitcoin ETFs would result in approximately 7,142 BTC leaving exchanges daily. This suggests that it would take only nine months to completely consume all of the remaining BTC reserves on exchanges. 

Bybit has stated that a major contributor to this supply squeeze would be the upcoming Bitcoin halving event, which would reduce the cryptocurrency’s total supply by 50% by cutting Bitcoin miners’ rewards in half. 

The crypto exchange has also disclosed that after the halving event, the sell-side supply of BTC flowing into Centralized Exchanges (CEXs) will become grossly reduced. Additionally, Bitcoin’s “supply squeeze will ostensibly be worse.”

BTC To Become “Twice As Rare As Gold”

In its report, Bybit compared Bitcoin’s supply after the halving event with that of gold. The crypto exchange revealed that Bitcoin was steadily growing to become one of the safest investment choices, even for the most seasoned and sophisticated investors within the crypto space. 

According to the exchange, the Bitcoin halving event would significantly impact the cryptocurrency’s scarcity factor, making it an even rarer asset than gold. 

Basing this analysis on the Stock-to-Flow (S2F) ratio, Bybit disclosed that Bitcoin’s S2F ratio is around 56 currently, while gold’s ratio is 60. After the halving event this April, Bitcoin’s S2F ratio is projected to increase to 112. 

“Each Bitcoin halving sharpens the narrative of Bitcoin as not just a currency, but a scarce digital asset, akin to digital gold. This upcoming halving in 2024 will thrust BTC into an era of unprecedented scarcity, making it twice as rare as gold,” the Co-founder and CEO of Bybit, Ben Zhou stated. 

While highlighting the significance of Bitcoin’s rarity following the halving event, another report also disclosed that the price of Bitcoin would experience significant upward pressure post-halving. This suggests that BTC’S supply squeeze could potentially propel its price to new heights during this period. 

Furthermore, the report revealed that several crypto analysts predict that the post-halving increase in Bitcoin’s price would be less remarkable than the early pre-halving surge which saw the price of Bitcoin hitting new all-time highs of more than $73,000.