Last Saturday night the time had come: the Bitcoin Block Subsidy halved for the fourth time. Since then, the BTC network has only issued 3.125 BTC instead of the previous 6.25 BTC per block (roughly every ten minutes).
What happened in the short term: nothing. No wonder: After all, expectations of the price increase that will accompany the shortage of supply are regularly priced in. The halving no longer surprises anyone.
Nevertheless, price movements could definitely be expected in the medium term, as you can read in our latest Bitcoin Report.
When does the halving effect come?
The real economic effect of the Subsidy halving does not arrive in the market immediately after the event. It will take a while for the lower inflation to really become noticeable. In addition, with each halving, the actually measurable effect on the economic reality in the network decreases. Finally, the step from 25 BTC per block to 12.5 BTC per block (halving two) is larger than the current move from 6.25 to 3.125 BTC. In addition, over 93 percent of all coins that have ever existed have already been mined.
Nevertheless: With an inflation rate of 0.8 percent, Bitcoin has been the hardest monetary asset in the world since the halving. Even gold, with an annual increase in volume of around two percent, has an inflation rate that is more than twice as high. This gives cause for optimism. Especially when you consider that in the past things only really started six to twelve months after the halving. “Bitcoin’s average performance only accelerated in the 3 months following previous halving events,” writes crypto fund provider Hashdex in a report.
By the way: Bitcoin’s scarcity will only really take effect in the medium term. By 2032, 99 percent of all BTC will have been mined. After that, there is hardly any additional supply for about 100 years – there has never been a harder, more inelastic money in human history.
So it is possible that BTC could increase in value in the medium term. But for now it’s time to be patient.
In addition to the price, the halving also has a major impact on many other areas in the BTC ecosystem. These include mining, transaction fees and the Runes protocol. You can read about the effects that can now be expected in the new Bitcoin Report.
Disclaimer: All content presented in the article is for informational purposes only and does not constitute investment advice.
This might also interest you