In simple terms, halving is when the reward for mining Bitcoin is cut in half, reducing the amount of new Bitcoin being created. This event happens every 210,000 blocks, which is roughly every four years.
It’s like the network is saying “hey, we need to slow down the supply of Bitcoin and make it more valuable, so let’s give out fewer rewards for mining.”
But what does that mean for you as an investor?
Well, historically, halving events have led to a surge in Bitcoin’s price, as the supply of new Bitcoin decreases while demand stays the same or increases.
The last Bitcoin halving happened in May 2020, and it cut the block reward from 12.5 BTC to 6.25 BTC, and Bitcoin’s price soared from around $8,000 to over $60,000 in less than a year!
So, mark your calendars for the next halving event, which is expected to happen in 2024, and keep an eye on Bitcoin’s price leading up to and following the event.