Bitcoin halving: Why Bitcoin investors maintain confidence despite value decrease

WEB DESK: Crypto currency “Bitcoin” underwent its scheduled halving on Friday, reducing the rate of new Bitcoins created to approximately 3.125 coins every ten minutes.

The helving event drew significant attention from investors and industry observers. Despite the halving, Bitcoin’s price remained stable at around $63,000.

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The halving is a pre-programmed feature of Bitcoin’s design, introduced by its creator, Satoshi Nakamoto. It involves cutting the reward for miners who validate transactions on the Bitcoin network. This time, successful miners receive 3.125 Bitcoin per block, down from 6.25 previously.

Some see the halving as essential for maintaining Bitcoin’s scarcity and value. However, others view it as a technical adjustment that may influence Bitcoin’s price.

Bitcoin’s recent surge to an all-time high of $73,803 in March fueled excitement among investors, driven by factors such as regulatory approvals for Bitcoin exchange-traded funds and expectations of central bank interest rate cuts.

Past halving events, occurring roughly every four years, have often coincided with price rallies. However, analysts are divided on whether this halving will have a significant impact on Bitcoin’s price.

The halving also poses challenges for Bitcoin miners, as it reduces their rewards. This could lead to industry consolidation, with smaller miners potentially facing disadvantages.

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Some analysts predict a short-term decrease in Bitcoin’s price following the halving, a view shaped by various factors, including market conditions characterised by excessive buying, reduced funding for cryptocurrency ventures, and Bitcoin’s valuation surpassing its gold comparison after adjusting for volatility.