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Investing.com — Supply growth is set to fall below 1% for the first time next month when the “halving event” begins, underscoring the popular cryptocurrency’s scarcity premium and likely fueling the current bull run just as institutional investors join the market. rush for “hodl” the popular cryptocurrency.
“Bitcoin supply growth is currently around 1.7% and will be reduced to just under 1% for the first time in Bitcoin history,” at the next halving event, expected “on the 17th April,” Director of Education and Governance Initiatives at Web3 Foundation told Investing.com’s Yasin Ebrahim in an interview Thursday.
Halving events, which occur once every four years, halve the amount of bitcoin miners produce on the bitcoin blockchain, or network, hence the “halving.”
But what exactly is being halved?
The only way to create bitcoin is to produce blocks for the Bitcoin network. Each block currently produces 6.25 bitcoins which are distributed to miners responsible for validating transactions stored in blocks on the blockchain. But at the next halving event, this reward will be halved to 3,125 BTC, slowing the rate at which new bitcoin is minted and increasing its scarcity and price.
Approximately 19.6 million bitcoins, approximately 93.59%, of the total 21 million bitcoins have already been mined. “In the future miners will fight for a much, much smaller issue of Bitcoin in each block,” Laboon said, adding that there is still a long way to go before the last block, expected in 2140, is mined.
Since its inception in 2009, three halving events have occurred that have reduced bitcoin’s supply growth from a rate of 25% to just under 2% today.
The halving story appears to be a smile from the bitcoin bulls
During the previous four-year halving cycle, the price of bitcoin followed a distinct path into three main periods: pre-halving, halving, and post-halving.
In the previous cycle in May 2020, Bitcoin was trading at around $9,000 before the halving, but after the halving on May 11, 2020, it began a bull run towards an all-time high of $68,982.20 by November 2021 before undergoing a significant correction.
The 18-month period between bitcoin’s halving and the price peak is consistent across historical data from previous halving cycles. With the current BTC price peak expected to be reached during the third week of October 2025, at a time when institutional investors are entering the fray – following the launch of spot-bitcoin ETFs in January this year – many are optimistic that there will be plenty of runway left in the current bull market.
U.S.-based spot Bitcoin ETFs have amassed more than $60 billion in assets under management as of March 16, according to Coinglass data, along with Blackrock’s (NASDAQ:) iShares Bitcoin Trust and Fidelity Wise Origin Bitcoin Fund of Fidelity (NYSE: ) leading the charge.
Bitcoin is evolving. . .
After the last block has been mined and 21 million bitcoins are in circulation, many worry about what the future holds for the bitcoin blockchain as miners may be less incentivized to continue maintenance of the network without the reward for the production of new blocks.
But bitcoin use cases – beyond simply transferring bitcoin from one user to another – are starting to emerge, increasing activity on the network and related transaction fees that could prove far more profitable than the reward miners get. they receive for churning it out. new blocks.
“We’ve actually seen, over the last year or so, that there have been other uses of the Bitcoin network beyond just passing Bitcoins around, most famously ordinals,” which can be considered a “super NTF fungible),’” Laboon said.
“As time goes on, this fee market will take the place of new Bitcoin issues to ensure that miners are still paid to carry out ongoing security work in the network,” he added.
The rise of the creation of layer two technologies or off-chain networks – built on layer 1 blockchains like bitcoin – is “a very large growth area” for bitcoin, Laboon added, as it allows people “to use the bitcoin security to run more complicated programs that have been built, at times, on other blockchains.”