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With the latest Bitcoin halving, the BTC mining rewards have reduced from 12.5 BTC to 6.25 BTC. Since its last halving in 2016, the BTC price has appreciated 1200% so far until the third event.
Well, the much-awaited event of the crypto community aka the Bitcoin halving 2020 is finally here. At 19:23 UTC on May 11, miners finally rushed to mine the 630,000th block, thereby triggering the programmed halving event. Bitcoin halving is basically a programmed event in the Bitcoin algorithm that occurs every 210,000 or roughly every four years. The third Bitcoin halving event reduces the mining rewards to 6.25 BTC from the previous 12.5 BTC. On the other hand, the mathematical complexity of mining new Bitcoin has increased.
At the time of third Bitcoin halving, BTC was trading at a price of $8550. At press time, Bitcoin is trading at a price of $8712 with a market cap of around $160 billion. Just a day before halving, BTC price crashed 10% slipping below $9000 levels on Sunday. Below there is a tweet showing how the Bitcoin price has come so far with the last three halvings.
BLOCK 630,000 ☑️
3rd #Bitcoin Block Reward Halving event has occured 🔥
1st ✂️ Nov 28, 2012: $12
2nd✂️ July 09, 2016: $650
3rd ✂️ May 11, 2020: $8,550
4th ✂️ halving in 2024: ?
— Shalini⚡ (@DesiCryptoHodlr) May 11, 2020
On the other hand, f2pool which mined the last BTC block before mining embedded a message stating: “NYTimes 09/Apr/2020 With $2.3T Injection, Fed’s Plan Far Exceeds 2008 Rescue”.
The final Bitcoin block with a subsidy of 12.5 BTC was mined by @f2pool_official and contained the following message in its coinbase transaction:
🐟NYTimes 09/Apr/2020 With $2.3T Injection, Fed's Plan Far Exceeds 2008 Rescuehttps://t.co/9dtTrC8YH6
— Jameson Lopp (@lopp) May 11, 2020
Technically, BTC price is expected to surge further as Bitcoin halving causes miners to accommodate more tokens before the rewards go down. Also, with every block mined, as we approach the maximum supply of 21 million the scarcity drives investors to purchase more BTC.
Over the last few years, BTC mining costs are on a rise steep rise. This is due to costly high-end hardware to decode Bitcoin network’s complex algorithm. Besides, this hardware also consumes large amounts of electricity taking the overall costs high.
Recently, the average Bitcoin computing power hit its all-time-high at 121 exahashes per second (EH/s). The Bitcoin mining difficulty is the measure of how difficult it is to compete for mining rewards.
Analysts Having Mixed Response with Third Bitcoin Halving
As said that BTC mining costs are surge at one end and on the other end, the mining rewards are tanking. Thus, some analysts think miners will be less interested henceforth since there’s little incentive to mining new BTC.
This could possibly have a direct impact on the miners. Some experts say that the Bitcoin mining devices getting outdated, the recent halving will force miners to shut down operations. On the other hand, some analysts think that the long-term potential of Bitcoin still remains high. Speaking to Reuters, Edward Moya, senior market analyst at OANDA in New York, said:
“The incentive is less for miners now to mine bitcoin and they will probably switch to more profitable cryptocurrencies. So in the short term, there’s going to be pressure for bitcoin. But longer-term, you’re probably going to see higher prices. With all the fiscal and monetary stimulus that’s being pumped into the global economy, there’s renewed interest from institutional traders looking for alternatives to modern government-backed currencies.”
On the other hand, Bitcoin has also exhibited massive volatility so far in 2020. The Bitcoin (BTC) price has covered a wide range from the low of $5000 to the highs above $10,000. Scott Freeman, co-founder and partner at crypto firm JST Capital, thinks that now that Bitcoin halving event is over, volatility will subside.
“Given that the halving happened without any interruption to crypto markets, we expect to see continued growth in the crypto eco-systems, especially with recent increased interest from institutional investors and the continued buying by retail investor,” added he.