What is Bitcoin Halving and How Does it Affect the Market?
One of the most important and major concepts you will come across in the crypto market is Bitcoin halving. This is process has great significance for the flagship crypto asset. Anyone looking to invest in or trade Bitcoin needs to know about the process of halving, what it is, how it impacts the market and if there are any benefits it offers to the traders.
The more information interested parties have about the crypto space and crypto king, the easier it is for them to buy, sell or trade it. Since the crypto space is known to be vast and volatile, you should never start buying or trading crypto without properly understanding how things work first.
The details mentioned below will help you understand major aspects of halving, such as what it stands for, how it affects the price of the flagship cryptocurrency and how can one benefit from it. These are all essential details to know before the next Bitcoin halving.
What Does Bitcoin Halving Mean?
Halving is an essential term to know about and as the word already suggests, it means cutting the future supply of Bitcoin in half.
In this way, the future supply of the crypto king will always be limited while the demand will keep rising. This will cause the price of the flagship digital asset to surge instead of declining. Another benefit of halving is that it will also keep the cryptocurrency from inflation.
New BTC tokens are made through mining and as new coins are mined the supply will keep getting reduced to half.
If you understand the basics of the concept you can learn about its mechanics and other relevant features mentioned below.
Mechanics of Halving
Knowing about the mechanics of the halving process is crucial for you to know about before the next Bitcoin halving. There is a countdown that keeps calculating the next time Bitcoin needs to be reduced to half.
The halving process essentially takes place after every four years. While this is the basic idea, the ETA can also be changed. This is because of the reason that the block time on the countdown changes on a daily basis. And a new block is added after every 10 minutes. A change in the block time also causes a change in the ETA of the countdown.
Therefore, considering this factor, a more accurate calculation of the next Bitcoin halving would be after every 210,000 blocks.
Dates of the Halving Processes
The flagship crypto asset was launched in 2009 and the first Bitcoin halving took place in 2012. According to the calculations mentioned above the third and most recent halving took place in 2020.
Now the next Bitcoin halving is anticipated to take place in 2024.
Before that occurs, let’s find out if you can benefit from this crucial process in any way.
Is There a Benefit of Halving for the Traders?
The crypto space does offer numerous opportunities to the interested parties. However, the benefits are never guaranteed and depend on how well the traders and investors are familiar with the crypto space, among other things.
There are several ways people can take advantage of the upcoming Bitcoin halving. However, one of the best strategies to consider is the buy and hold strategy.
If you are interested in benefitting from halving. You can use this strategy where you can buy the crypto king and store it in your wallet. Once the halving process is completed, the price of Bitcoin is speculated to surge.
This strategy has helped people in getting some profits in the past but it does not guarantee the same outcome again. Therefore, as a crypto trader always make sure you only trade as much as you can afford to lose.
Impact of Halving on the General Market
Bitcoin is the most prominent crypto asset in the world and has at least 60% dominance in the crypto market. This means that any price movement noted for Bitcoin also causes the prices of other altcoins to fluctuate.
When the price of the crypto king is in an upward momentum. The prices of altcoins tend to underperform as people start taking their funds out from them and invest them in Bitcoin. This is done in order to benefit from the massive price surge that usually happens after every halving process is completed.
How to Invest in Bitcoin?
If you are interested in buying the crypto king then the first thing you need to consider is choosing a secure and suitable exchange.
A suitable exchange can be categorized as one that suits your needs. And matches your criteria as a crypto investor or trader the most.
And since the crypto space is a volatile and risky place. To choosing a secure exchange is essential to limit the risks you may face and instead have a good crypto investing experience. Therefore, if you want to buy BTC before Bitcoin halving occurs next then be sure to choose a good exchange.