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Bitcoin “Halving” Has Happened, CoinGecko Says
By Elizabeth Howcroft
LONDON (Reuters) – Bitcoin, the world’s largest cryptocurrency, completed its “halving” on Friday, a phenomenon that happens about every four years, according to CoinGecko, a crypto data and analytics firm -cash.
Bitcoin remained fairly stable immediately afterward, falling 0.47% to $63,747.
Bitcoin enthusiasts have been eagerly awaiting “halving,” a change in the cryptocurrency’s underlying technology designed to reduce the speed at which new bitcoins are created.
Halving was written into bitcoin’s code from its inception by pseudonymous creator Satoshi Nakamoto in order to reduce the speed at which bitcoins are created.
Chris Gannatti, global head of research at asset manager WisdomTree, which markets Bitcoin exchange-traded funds, called the halving “one of the biggest events in crypto this year.”
For some cryptocurrency fans, the halving will highlight bitcoin’s value as an increasingly scarce commodity. Nakamoto capped Bitcoin’s supply at 21 million tokens. But skeptics see nothing more than a technical change touted by speculators to inflate the price of virtual currency.
The operation works by halving the rewards cryptocurrency miners receive for creating new tokens, making it more expensive to put new bitcoins into circulation.
This follows a surge in bitcoin’s price that reached an all-time high of $73,803.25 in March, after spending much of 2023 slowly recovering from 2022’s dramatic plunge. On Thursday, the largest cryptocurrency in the world was trading at $63,800.
Bitcoin and other cryptocurrencies were supported by enthusiasm over the U.S. Securities and Exchange Commission’s decision in January to approve Bitcoin spot exchange-traded funds, as well as expectations that which central banks would reduce interest rates.
Previous halvings took place in 2012, 2016, and 2020. Some crypto fans point to the price rise that followed them as a sign that Bitcoin’s next halving will increase its price, but many analysts are skeptical.
“We do not expect the price of bitcoin to increase after the halving, as it has already been priced in,” JP Morgan analysts wrote this week.
They expect the price of bitcoin to fall after the halving because it is “overbought” and venture capital funding for the crypto industry has been “moderate” this year.
Financial regulators have long warned that bitcoin is a high-risk asset, with limited real-world uses, although more have begun to approve bitcoin-related trading products.
Andrew O’Neill, crypto analyst at S&P Global, said he was “somewhat skeptical about what lessons can be learned in terms of price prediction from previous halvings.”
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“It’s just one of a multitude of factors that can determine prices,” he said.
Bitcoin has struggled to find direction since March’s record high and has fallen over the past two weeks as geopolitical tensions and expectations that central banks would maintain higher rates for longer roiled global markets.
(Reporting by Elizabeth Howcroft, Kanjyik Ghosh and Urvi Dugar; editing by Tommy Reggiori Wilkes, Toby Chopra and Cynthia Osterman)