Discover what the bitcoin halving is and how it could impact its value | The truth

This is an event scheduled every four years (or every 210,000 mined blocks) on the bitcoin network. To understand this event, which is expected to culminate between April 19 and 20, we must first understand the work of the miners who, through complex algorithms and powerful computers, compete to solve complex algorithms and add a new block to the chain. of blockchain. Whoever achieves it receives a certain amount of bitcoins as a 'prize'. And that reward is now reduced by half.

These types of events have been planned since the very birth of cryptocurrency. Simon Peters, expert analyst in crypto assets at the eToro investment and trading platform, indicates that the most logical theory is that by gradually reducing the supply of new bitcoins that enter circulation, the 'halving' helps to increase the value of the network with time. “Bitcoin will continue to have halvings until around the year 2140, when the reward for adding a new block is zero and the supply stops increasing,” he recalls.

The reward for mining a block started at 50 bitcoins in 2009. With the first 'halving' in 2012 it was reduced to 25 bitcoins. In the second 'halving', in 2016, it decreased to 12.5 per block, and in the third, in May 2020, it dropped to 6.25. This month's halving will see the reward reduced from 6.25 to 3.125 bitcoins per block.

Nobody knows it for sure. After the recent rises in the cryptocurrency, many consider that the lower supply that will now be in the market has already been collected. “While uncertainties remain, including regulatory developments and market sentiment, many investors remain optimistic about bitcoin's long-term prospects,” says Manuel Villegas, digital asset analyst at Swiss private bank Julius Baer. “The halving could serve as a catalyst for a new cycle of growth in the cryptoasset market,” he adds.

For their part, eToro recalls that the renewed interest of investors in crypto following the launch of the first ETFs (traded funds) can maintain the upward trend.

IG analysts remember that the last time bitcoin had a 'halving' was on May 11, 2020, when mining rewards were reduced by 50%, going from 12.5 new bitcoin per block to 6.25 bitcoin . “The price rose from $6,877 on April 11 (one month before the 'halving') to $8,821 at the time of the event itself,” they indicate. “Despite significant volatility, the price continued to rise over the following year until reaching $49,504 on May 11, 2021,” they add. And that pattern was repeated in the previous halvings of 2012 and 2016.

“It is possible that this halving in the issuance of new bitcoins will have a smaller impact on the market than on previous occasions, but what is certain is that its effect will not go unnoticed,” says Ángel Luis Quesada, CEO and Co- founder of Onyze.

According to BBVA experts in a recent analysis, there will be dozens more halving operations, until the limit of 21 million established at its birth reaches, something that will happen around the year 2140, according to the cryptocurrency protocol. .

As of January 2024, there are more than 19.59 million bitcoins in circulation, 92% of the total issuance.