This event represents the halving of the rate at which the cryptocurrency gets released into the market. It happens approximately every four years after miners go through 210,000 blocks. It is essential for the cryptocurrency market because it slows down the demand, as the supply is finite. Only 21 million Bitcoins exist, with more than 18 million already in circulation. Just a little above 2 million is available for mining. Miners receive a reward for every mined block in the chain.
Since 2009 when it all started, the reward got smaller and smaller. If in 2012 it was 50 BTC, this year's prize is 6.25 BTC per mined block. This type of event makes the price move. For example, in 2012, the price surged from $10 to $1,150. In 2016 the initial price was approximately $650, and after the halving took place on December 16, 2017, the price reached the historic max of $20,000. Although it dropped to $3,200, it was still bigger than the pre-halving price by a factor of 4.
The Bitcoin price was over $10,000 during yesterday's trading session for the first time since February, just before the next week's halving. On February 24, it was above $10,000 before it reached a low of $4,000, a level unseen since March 2019. In just one day, it gained more than 6.4%. Since March the price went up by more than 150%.
Ethereum, the next in line after Bitcoin by market capitalization, gained 3.8% in just one day. The overall value of the cryptocurrency market increased yesterday by more than $13 billion.
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Sources: marketwatch.com, cnbc.com, coindesk.com, investopedia.com
