Bitcoin (BTC) and Bitcoin Cash (BCH) Halving Event 2024

What to Expect, Block Reward, Halving History, Dates and Details!

Introduction

The year 2024 marks a significant event in the crypto space: the halving of both Bitcoin (BTC) and Bitcoin Cash (BCH). This technical event, intricately woven into the fabric of these blockchains, has the potential to significantly impact the entire crypto market.

Here, we delve deep into the nitty-gritty of the 2024 halving for both Bitcoin and Bitcoin Cash, discussing the halving mechanism, why is it done, what happened to the prices in previous halvings, what can we expect for this halving and much more!n Let’s get started!

Bitcoin and Bitcoin Cash Halving 2024: A Quick Highlight

This table provides a quick reference for the estimated dates, block heights, current and reduced block rewards for the upcoming halving events in both Bitcoin and Bitcoin Cash for 2024.

What is Halving? Let’s Understand the Mechanism in Detail

Before diving into the details of this year’s halving event, let’s first establish a common ground. Halving, simply put, is a pre-programmed feature within the Bitcoin and Bitcoin Cash protocols that cuts the block reward for miners in half at predetermined intervals.

Miners are the workhorses of these blockchains, solving complex cryptographic puzzles to verify transactions and secure the network. As a reward for their efforts, they receive a set amount of cryptocurrency for each block they successfully mine. The halving mechanism plays a crucial role in these cryptocurrencies’ monetary policy. By periodically reducing the new supply of coins entering circulation, it aims to achieve two key objectives:

First is Controlled Inflation:

• Similar to central banks that manage fiat currencies, halving helps control inflation within the Bitcoin and Bitcoin Cash ecosystems. With a finite number of coins pre-determined (21 million each for both Bitcoin and Bitcoin Cash), halving ensures a predictable and gradual increase in coin scarcity over time.

And, the Second is Network Security

• The block reward incentivizes miners to dedicate their computing power to securing the network. However, its impact on security is indirect. If the asset price remains constant, miners need to become more efficient to maintain profitability. Conversely, a price increase doesn’t necessarily double the security. Halving the block reward directly incentivizes their efficiency, ultimately helping to keep the network secure.

Bitcoin Halving 2024: Everything That You Need to Know!

Now, let’s zoom in on the upcoming Bitcoin halving in 2024. Currently, Bitcoin miners receive a block reward of 6.25 BTC for every block they mine. This reward is expected to be slashed in half, dropping to 3.125 BTC, around April 20, 2024. This will be the fourth halving event for Bitcoin since its launch in 2009.

Bitcoin (BTC) Halving History:

2012 Halving

• Prior to the 2012 halving, Bitcoin’s price hovered around $12. In the months following the halving, the price surged to a peak of over $1,100, reflecting a near 100x increase.

2016 Halving

• Before the 2016 halving, Bitcoin’s price was around $535. It then embarked on a gradual climb, reaching a new all-time high of nearly $19,000 in late 2017.

2020 Halving

• Leading up to the 2020 halving, Bitcoin’s price fluctuated around $8,590. Following the halving, the price experienced a significant upswing, reaching a new all-time high of over $64,000 in 2021.

Source: etoro.com

Bitcoin Cash Halving 2024: A Separate Story

Bitcoin Cash, a hard fork of Bitcoin created in 2017, also has a halving mechanism built into its protocol. However, Bitcoin Cash’s halving schedule differs slightly. The current block reward for Bitcoin Cash miners is 6.25 BCH. This will be halved to 3.125 BCH around April 4, 2024, a little earlier than Bitcoin’s halving.

What is BCH Halving and Why does it happen?

Block halving occurs every four years, or every 210,000 blocks on the Bitcoin Cash blockchain. The current block reward is 6.25 BCH, and the next block reward will be 3.125 BCH. This reduces the rate at which Bitcoin Cash is created. The halving occurs on regular intervals and is encoded into the Bitcoin Cash code.

When governments or banks expand the money supply, conventional FIAT currencies could be subject to inflation. Bitcoin Cash, on the other hand, has a total supply limitation of 21,000,000 BCH, which ensures that no new coins can be generated after this point. This restricted quantity, along with potential surges in demand as more people use Bitcoin Cash, compares it to investment, a resource having a limited supply that cannot be automatically increased.

Bitcoin Cash (BCH) Halving History:

• Bitcoin Cash Halving (2020): Bitcoin Cash’s first halving took place on April 8th, 2020. Due to its shorter history and smaller market capitalization compared to Bitcoin, price movements are more volatile. While there was a temporary price increase post-halving, Bitcoin Cash’s price experienced its pre-halving levels in the first week of March, 2024 by almost a 50% hike in the price.

(Source for BCH price chart and halving data of 2020: Coingecko.com)

What Can We Expect This Halving for Both Bitcoin and Bitcoin Cash?

Both Bitcoin and Bitcoin Cash are expected to experience significant impacts due to the 2024 halving events. Here’s a breakdown of the commonalities and specific considerations for each cryptocurrency:

Reduced Supply

With the halving cutting the block reward in half, fewer new coins (BTC or BCH) will enter circulation. This creates scarcity in the market, which, according to the principles of supply and demand, could drive up the price of existing coins.

Increased Mining Difficulty

To maintain network security, the mining difficulty for both Bitcoin and Bitcoin Cash automatically adjusts based on the total hashing power dedicated to the network. With a reduced block reward, miners might need to invest in more powerful hardware to maintain profitability. This could lead to an increase in mining difficulty for both currencies.

Historical Price Movements (Bitcoin)

Looking back at previous Bitcoin halvings (2012, 2016, and 2020), we observe a surge in price following each event. It’s important to remember, however, that past performance is not a guarantee of future results. Several other factors, such as global economic conditions, regulations, and investor sentiment, can influence Bitcoin’s price, making it difficult to predict the exact impact of the 2024 halving event.

Price Movement Analysis (Bitcoin Cash)

Bitcoin Cash (BCH) and Bitcoin (BTC) share a history of halvings up until the fork in 2017. That shared history can provide some background, but it’s important to remember that Bitcoin Cash has its own independent halving cycle, with the first separate one that happened in April, 2020 and now the second one which will take place in April, 2024. Because of this, along with the influence of market conditions and investor sentiment, Bitcoin Cash’s price movements can be quite distinct from Bitcoin’s.

Final Thoughts…

In conclusion, whether the halving of Bitcoin and Bitcoin Cash is seen positively or not is determined by individual opinions as well as the larger economic and market backdrop. It is a core component of Bitcoin and Bitcoin Cash’s architecture and monetary policies, with varying implications for different stakeholders like miners, investors and end users.

Understanding the complexities of BTC and BCH halving requires a planned and well-informed approach. The pre-halving rally, historical patterns, pre-halving retrace, post-halving reaccumulation, and following parabolic run-up all influence the market landscape. Stay tuned with Zapit for more such updates on the halving and other crypto happenings!