He bitcoin is trading higher in its first day after the last halving, which consists of halving the price obtained by the miners, who obtain the cryptocurrency through computers.
After this event became official, which occurs approximately every 4 years, bitcoin It appreciated about 2.33% this afternoon, reaching $65,204, although still far from its all-time high.
It is designed to control the supply of crypto and maintain its value over time, since by halving the number of new cryptocurrencies lower the inflation and guarantees the shortage, in a movement similar to what happens with the gold.
Specifically, the halving seeks to ensure the longevity of bitcoin, limiting its total to 21 million (the last one is expected to be mined around the year 2140) and keeping the supply decreasing, something essential to maintain the value over time.
With the incorporation of the ETFs of the cryptocurrency, a new avenue for investment was opened, especially for institutional investors, which could give a boost to the value.
To explain the concept of “computational power” it is like a computer that solves mathematical calculations. The stronger it is, the more calculations it can solve in less time, leading to greater profit. When a miner solves an algorithm, it proposes a new block of transactions to be added to the blockchain. As a reward for his work, the miner receives a set amount of the cryptocurrency, in addition to the transaction fees associated with the transactions included in the new block.
The mining process is also what introduces new units of the cryptocurrency into circulation, in a process that resembles mining precious metals in the real world, hence the term “mining.” This reward mechanism incentivizes miners to contribute their computing power to the network, helping to keep it secure and operational.
A possible increase in the price of bitcoin
This event could push the price up, as anticipated by Ámbito Argentina Min Linregional vice president of Binance for Latin America, noting that “the halving reduces the supply of new bitcoins and, since it is an asset with a fixed maximum supply, basic economics would dictate that a price increase is the natural next step.”
The halving essentially creates scarcity for bitcoin and further reinforces the narrative as digital gold. Historically, BTC has experienced notable price rallies in the six months following each halving event,” Min Lin highlighted.
And he closed: “These price rallies underline the market response to the reduced supply of new bitcoins and elevated demand often drives the value of the cryptocurrency. Although past performance is not indicative of future results, these historical trends provide insight into the potential impact on price dynamics.”
Source: Ambito
