Last Updated on:
The idea of Bitcoin came as a hedge against inflation. Like gold, land, or any other limited asset, the entire concept with Bitcoin was that its issuance should decline over time. For this to keep happening smoothly, an event called “Bitcoin Halving” occurs.
Bitcoin halving dates will keep happening till the entirety of the 21 Million Bitcoin comes into circulation. Meanwhile, you can profit off of this process by trading Bitcoin CFDs with us at CAPEX.
We at CAPEX have reached great heights and made our mark in the Bitcoin trading industry in a short time. Our top notch security measures ensure the safety of your data and assets. We have designed CAPEX to meet the intricate needs of hardcore traders.
Even though we serve mainly experienced traders, our focus is still on making CAPEX easy to use by any trader and based on an education-oriented philosophy. You can get instant access to our own online trading school, the CAPEX Academy, to learn from the basics of trading to eventually building your own data backed strategies. You can also practice everything you’ve learnt by trading with demo account.
Knowledge is Power!
When it comes to your money - it's priceless.
An investment in learning how to trade always pays the best dividends. Get access to the right resources, tools and information so you can trade with all the information available!Sign Up and enjoy our in-platform trading lessons
Even though we at CAPEX have repeatedly been ranked as one of the best online cryptocurrency platforms, we are not only limited to Bitcoin. We at CAPEX are a worldwide brand that uses more than 2100 CFD instruments across a plethora of asset classes. This includes Forex, Indices, Bonds, ETFs, Commodities, Shares, Blends, and Cryptocurrencies.
CAPEX is the winner of the Fastest Growing Provider of 2018 award and the prestigious Best Forex Educational Broker award in Forex Expo 2020, an event that highlights the best Forex brokerages in the market.
Bitcoin operates on a blockchain, and each block on this blockchain stores 1 MB worth of Bitcoin transaction records. “Miners” who verify these transactions by solving a complex mathematical problem adds these blocks. This produces a 64-character “hash”, which confirms the completion of the task and locking of the block. And miners accordingly earn Bitcoins by adding blocks of information on the Blockchain. This is an incentivisation mechanism so that people would continue to confirm transactions and add more Bitcoin into circulation.
After the mining of every 210,000 blocks, the pace of creation of new BTC cuts in half. The first Bitcoin halving date was in 2012 when the mining reward slashed down to 25 BTC. The next Bitcoin halving date came in 2016 with 12.5 BTC as the mining reward, and the most recent in May 2020, when Bitcoin Halving slashed the mining reward to 6.25 BTC.
The backbone technology of Bitcoin and most cryptocurrencies is Blockchain. It consists of a host of computers and systems known as nodes. These nodes run the Bitcoin software and contain its history of transactions. They also perform a plethora of checks to ensure that a transaction is valid. Only upon the successful conduction of these checks can the transaction complete.
Blockchain assigns encrypted addresses to each party in the network. Hence the record of transactions is visible to everyone on the Bitcoin network. Although, it is difficult to track down the transacting parties in the network. Therefore, the Blockchain acts as a pseudonymous record of transactions.
Experience a new level of trading with the right support when you need it. Sign up for a free account and trade smart with CAPEX.com.
Bitcoin mining works on a Proof of Work system. To receive rewards, every miner must prove that they’ve put in the work to process the transactions. Transactions of larger amounts need more checks and confirmations to ensure security. It’s called mining because it takes the digital equivalent of the physical work it takes to mine precious materials out of the earth.
Bitcoin mining is very intensive on the CPU and GPU, and many miners purchase high-end mining gear to make a profit. Since the process also takes a lot of electricity, most small scale miners don’t even break even on the electricity costs. The good news is that, with us at CAPEX, you don’t need to go through the mining route to reap the benefits of Bitcoin, as you can easily trade crypto through CFD. CFD trading is one of the most popular ways to profit from cryptocurrency, which can be easily done with us at CAPEX.
Bitcoin halving is a process that involves synthetic inflation methodologies that halves the release rate of new Bitcoin. Bitcoin miners mine roughly every four years, about 210,000 blocks. However, a reduction of 50% occurs in the reward they receive for each block after achieving this number goal. Correspondingly, this practice leads to the intended 50% reduction in the rate of new Bitcoin entering the market for circulation.
There are cases when the halving doesn’t immediately cause the expected rise in Bitcoin’s price and thereby causing discouragement among Bitcoin miners. A usual prevention tactic to provide enough incentive to Bitcoin miners is a significant reduction in the complexity of the Bitcoin mining process. The difficulty of successfully mined transactions is decreased while not altering the block mining reward to act as an appropriate substitution for high Bitcoin values.
But remember that the market always ends up self-correcting, and most of the time, it’s a patience game. However, you can exploit these fluctuations in the Bitcoin rates by trading Bitcoin CFDs with us at CAPEX.
Limited supply creates more demand. Bitcoin halving works on this principle to increase the value of Bitcoins in the market. A threshold of 21 million Bitcoin is set beyond which the supply is dipped by 50%. The process of mining transactions is elongated, and so is the circulation process of a fresh block of Bitcoin in the market. The scarcity of Bitcoin per block ensures a higher demand for Bitcoin, leading to a significant jump in its price.
The rise in price helps counterbalance the halving of mining rewards and keeps the Bitcoin miners incentives in check. The more protracted mining process pays more in the form of a higher commission fee, which is enough to encourage the corresponding miners. Therefore, Bitcoin halving date has a simple goal of increasing demand and, accordingly, the value.
There are loads of educational video lessons, reading materials, feature articles, and the demo trading account to assist traders with their cryptocurrency trades. The CAPEX Academy is the perfect companion for traders to improve and gain trading experience. Featured articles cover a wide range of financial and investment topics. The CAPEX Academy is the ideal training platform for traders and, when used with the demo trading app, it is the perfect practice environment.
The process of Bitcoin halving has persisted since its conception by Satoshi Nakamoto. There hasn’t been any official dialogue over the employment of this particular process to enable the creation of new Bitcoin blocks and their circulation in the market. However, speculations run wild among miners and investors, which formulate that the process of Bitcoin halving was meant to incentivise Bitcoin miners and investors by the rapid circulation of additional Bitcoins in the market.
Additionally, considering the other aspects of the investment market, such as the growing public attention towards cryptocurrency through media involvement, other factors have also contributed to the rise in Bitcoin pricing. A speculated advantage of digital commodities related to transparency has been apparent among investors, and as a moderate surge in Bitcoin use was observed, others have followed by example. However, all facts considered, Bitcoin halving dates increased the demand, followed by large-scale public investment These increase in price is an excellent opportunity to make a fortune by CFD trading with us at CAPEX.
The half-cut on reward for each block of bitcoin mined leads to a delay in the mining process. The rate of the issue of new bitcoin halves, significantly reducing the circulation of new bitcoin. This deceleration generally leads to a jump in bitcoin price. The surge in price helps incentivise the miners for further mining activities by making up for the losses due to block reward halving. This helps to mitigate Crypto Inflation, which manages to work in favour of the bitcoin miners. Therefore, the elongation of the mining process and fresh circulation process is usually a time of growth among miners.
While Bitcoin mining or purchasing can be a rather tedious affair, the introduction of high-profit yielding Bitcoin CFD trading has already taken the world by a storm. This is because you don’t need a Bitcoin wallet to trade CFDs, the spreads are tighter, and you can even profit from falling Bitcoin prices by short sell positions. We at CAPEX have an app that can be considered the best CFD trading app in the business.
The implications of Bitcoin halving are displayed in the rising Bitcoin prices. Lowering the supply of new Bitcoin for circulation is directly correlated to increased demand by investors. Several commodities, such as gold and precious gems, have high costs, majorly owing to their rarity rather than their shiny appearance. Bitcoin halving intends to create this artificial rarity in the market once a capping supply for 21 million Bitcoin is reached.
A recent case study presented by the actions of Tesla CEO Elon Musk displays the importance of cryptocurrency usage in modulating its prices. Musk announced on May 12th 2021, that Tesla would not consider Bitcoin as a form of payment any longer, which caused significant Bitcoin price alterations. The following week also saw the Bitcoin price drop below $40,000. We can attribute this to Chinese regulators’ sudden restrictions, banning cryptocurrency transactions by financial markets and payment institutions. These two incidents appear to undertake blame for the fall in Bitcoin price solely. However, investors observed that the drop in Bitcoin value could potentially be a significant consequence of Bitcoin halving instead.
Bitcoin halvings have previously been observed to cause a significant rise in Bitcoin prices. On November 28th 2012, the date of the first halving, Bitcoin prices shot up to $1,207 from $12. We can see a similar surge after the second halving on July 9th 2016. The price experienced a significant boost, from $647 in July 2016 to $19,345 on December 15th 2017. These seemingly separate incidents displayed a considerable correlation between halvings and Bitcoin pricing.
From December 2017 onwards, a dip in the price was observed. The price experienced a fall of $16,090 throughout the year, finally settling to $3,255 on December 15th 2018. However, regardless of the drop, this price was still significantly higher than the price before the second halving, mathematically by a factor of approximately 403%.
The last halving observed on May 11th 2020, provided the largest observed boost to the Bitcoin prices. The prices surged to $63,558 on April 12th 2021, from $8,821 on the BTC halving date. This clear jump of 651% proves noteworthy enough to gauge the contribution of Bitcoin halving. The price went down to $49,504 by May 11th 2021, which indicates a solid 461% settlement compared to the pre-halving price a month after the peak. This factor seems to echo the results displayed by the Bitcoin halving in 2016. So, before the next Bitcoin halving date, join us at CAPEX and kickstart your trading career.
It is necessary to note that the initiation of Bitcoin halving is based on the threshold instead of a fixed period. After 210,000 blocks of new Bitcoin have been mined, the Bitcoin halving process is set into motion. Therefore, the halving process strictly intends to control the supply of new Bitcoin in the market. The next Bitcoin halving will potentially occur in 2024, as the new blocks of Bitcoin are expected to reach a whopping 840,000 by that year.
RegisterRegister an account on CAPEX.com and start trading.
VerifySend over your documents and verify your account.
DepositLogin into your CAPEX.com account and deposit money.
TradeStart trading with CFD’s and over 2100 other instruments.
The trust in the system of Bitcoin halving is currently based on highly satisfactory tried and tested results. However, the process of halving has an inherently volatile nature. A great deal of speculation and nervous excitement is seen whenever a Bitcoin halving date occurs, as an absolute certainty is far from guaranteed due to the small sample space of halving events and cryptocurrency’s volatility in the financial markets.
Several external factors, such as a completely unexpected global pandemic, rarely fail to influence markets. This is the biggest perk of Bitcoin halving. It makes sure that there remains a hedge against inflation, even if the external circumstances in the world are excessively volatile. CFD trading of Bitcoin through CAPEX is one way to save yourself from the troubles of directly owning something as volatile as Bitcoin.
We have already observed the highly successful results of the first two halvings. The third halving is still on its way to display results that agree with the pattern with the bull run that started in 2020. There is a highly probable soar in Bitcoin price due to an immediate increase in demand, and thereafter an observed crash of Bitcoin price, which still maintains a healthy value much higher than the pre-halving price. Therefore, the perks of halving are apparent in the markets and have succeeded in their mission to boost price and demand.
Trading with us at CAPEX.com is a pretty straightforward procedure that doesn’t change regardless of any Bitcoin halving date. The following are the steps to open an account with us:
Bitcoin halving dates will keep occurring until the mining of the entirety of the 21 million Bitcoin. While miners might not be particularly happy about a halving event, it is definitely one of the main events keeping the cryptocurrency afloat. However, halving is only one of the many factors that influence the price of Bitcoin.
We are one of the best online cryptocurrency brokers for investors looking for a professional and seamless trading experience as far as trading Bitcoin is concerned. Join us at CAPEX now to experience the best online CFD trading platform.