Bitcoin's Halving Event in 2024: 5 Tips for Traders & Holders

Bitcoin's halving event is a predetermined process coded into Bitcoin's network protocol that reduces the reward for mining new blocks by half. This event occurs approximately every four years (or every 210,000 blocks). The halving is significant because it directly influences the rate at which new Bitcoins are created, simulating a form of artificial scarcity similar to precious metals like gold. This scarcity is part of what supporters believe gives Bitcoin its value.

Published over two weeks ago
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Reviewed by Ellen Johnson

The halving impacts miners who use computing power to process transactions and secure the network. As the reward decreases, the revenue for miners also drops, potentially affecting their profitability. However, the event is also typically associated with increased interest and speculative activity around Bitcoin, which can affect its price.

Miners, traders, and holders are all eagerly anticipating what is likely the biggest event in the entire crypto industry: the Bitcoin halving. With the uncertainty surrounding this momentous event slowly building up as April draws near, everyone in the crypto sphere is looking for a way to handle what is going to happen in the market.

What Is the Halving?

The Bitcoin halving is an event programmed into the Bitcoin blockchain itself that triggers at every 210,000 blocks. Miners are rewarded with block rewards every time a block is mined. The initial block reward was set at 50 BTC, which was later reduced to 25 BTC in 2012's halving, 12.5 in 2016's halving, and is now at 6.25 BTC since 2020's halving. The next block height that will trigger a halving is 840,000 with around 19.6 million of a total of 21 million bitcoins minted and 29 of a total of 32 halvings still to come. Because there is no set time or date but rather a block number that determines when the halving happens, estimates expect the next halving to 3.125 BTC to take place somewhere in late April this year. The closer the next 210,000th block approaches, the better we can estimate the actual day of the halving.

The Effects of Past Halvings

While the halvings are certainly important events, it’s difficult to completely isolate their effect on Bitcoin and the crypto market. However, looking at data from the past three halvings, we can see that prices have generally increased (over the long term) following each event. These price increases may be unrelated to the actual halvings, but each halving does reduce the number of new bitcoins entering the market and therefore introduces more scarcity, which usually drives prices up all things considered.

From the November 2012 halving, prices increased 50% within two months and 1,200% within six months. From the July 2016 halving, prices remained relatively stable within two months and then increased by around 50% after six months. The May 2020 halving followed a similar pattern, with prices remaining stable for the next few months and only increasing by around 50% closer to the end of the year. Prices appear to actually have risen considerably before the last two halvings and then plateaued afterward, although the reason why is up for debate.

5 Halving Tips for Traders and Holders

Traders and holders tend to have different strategies when it comes to handling their digital assets, but these 5 tips we’ll be listing below will show everyone how to profit from Bitcoin halving in April.

  1. Keep an eye on the news. Subscribing to a crypto news hub to get the latest notifications of any occurrences in the crypto sphere is the first step in being a successful crypto trader or holder, especially in a volatile time like the halving.
  2. Weather it out. Without enough samples (halvings) to draw consistent data from, a safe strategy is to act on the best information we have: the bitcoin price has always gone up in the 6 months after the halving. Traders may look to keep on buying and selling, but holders can choose to keep their skin in the game and profit in the long term.
  3. Make smaller trades. The crypto market volume and volatility often increase around the halving, providing opportunities for traders to ride the ups and downs for profit and for holders to sell high and buy in again low. This is a more risky strategy but with potentially great rewards.
  4. Look to other coins. Altcoins may offer an attractive proposition for miners coming from the Bitcoin blockchain since block rewards are now halving. With an influx of miners often comes an increase in volume and prices, so keep an eye on other coins that may see a healthy increase in the coming weeks.
  5. Trust the process. Don't panic, Bitcoin won't collapse with a halving, nor will the network freeze up due to miners all bailing out. Most miners will keep mining for bitcoins even with lower rewards and Bitcoin will keep going. If you’re not sure what to do, hodl and continue placing your trust in Bitcoin.

Conclusion

The halving presents an attractive opportunity for traders and holders alike to profit and see Bitcoin itself continue maturing. While there may be an increase in uncertainty in the market, there are solid strategies that can be followed to ensure the halving remains an exciting event and not cause for concern.

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