Bitcoin (BTC) has recently experienced its third halving event in which it has reduced the new issuance of BTC from 12.5 BTC to 6.25 BTC per block. This is the reward that miners will receive every time they find a new block. After and before the halving, the price of Bitcoin remained stably and the crypto market operated without major changes.
Bitcoin Halving Event Takes Place
The entire cryptocurrency community has celebrated the third halving event in the history of Bitcoin. For those that do not know, Bitcoin and some other Proof-of-Work (PoW) cryptocurrencies reduce their rewards for miners every certain period of time. In this way, the new issuance of coins becomes slower and inflation rates for that specific network decrease.
Indeed, the inflation rate on the Bitcoin network was reduced to 1.8% on a yearly basis and only 900 BTC generated per day. It is worth taking into account that if demand increases, this could have a positive effect on the price of the virtual currency. Indeed, In the long term, if demand increases, we could see BTC surpassing its previous highs, as many experts believe that will happen.
When halving events take place, it is generally usual to see miners leave the market. This is something that is related to the fact now they have just half of the rewards they had before, which could affect miners’ profitability. On May 11, miners entered the space and allowed Bitcoin’s hash rate to reach new highs. Nonetheless, we need to wait to see how the coming days will affect the hash rate on the BTC network.
It is worth mentioning that the last block mined for the third generation of Bitcoin included a very important message: NYTimes 09/Apr/2020 With $2.3T Injection Fed’s Plan Far Exceeds 2008 Rescue.
The final Bitcoin block with a subsidy of 12.5 BTC was mined by @f2pool_official and contained the following message in its coinbase transaction:
🐟NYTimes 09/Apr/2020 With $2.3T Injection, Fed's Plan Far Exceeds 2008 Rescuehttps://t.co/9dtTrC8YH6
— Jameson Lopp (@lopp) May 11, 2020
This makes reference to how the United States decided to inject USD to the economy after the Coronavirus crisis that affected all over the world. While the FED injected $2.3 trillion, the global economy injected over $7 trillion to fight the negative effects of the COVID-19. Meanwhile, Bitcoin remains predictable with a clear issuance scheme that halves every 210,000 blocks (close to four years).
At the time of writing this article, Bitcoin is now being traded around $8,750 and it has a market capitalization of $160 billion.