The fourth halving occurred on the Bitcoin network on April 20; The reward miners receive for adding blocks has been reduced from 6.25 bitcoins to 3,125 bitcoins. Historically, this event has seen a significant increase in the price of the largest cryptocurrency, but things may be different now.

Halving is a planned event programmed into the network algorithm. Miners’ computers perform complex calculations that confirm transactions on a public ledger called the blockchain. Transactions create blocks, and miners race to complete the next block and add it to the blockchain. This happens approximately every ten minutes, and the miner is rewarded with re-released bitcoins for adding a block to the blockchain. This reward was halved last night from 6.25 to 3,125 bitcoins, which means about $200,000 at today’s exchange rate.

Halvings occur approximately every four years. These events had previously occurred in 2012, 2016 and 2020, and about a year after the halving, Bitcoin’s value skyrocketed. The first halving occurred on November 28, 2012, at $12.50 per coin. On November 29, 2013, Bitcoin was already worth $1,163, meaning its price has increased more than 93 times in a year. The second occurred on July 9, 2016 at $638.51. On December 15, 2017, the value of Bitcoin was $19,333, a 30-fold increase. The third occurred on May 11, 2020, when the cost of Bitcoin was $8,475. In November 2021, it reached $68,982.20, meaning its price increased 8 times.

Since the halving occurs under unique circumstances, it is difficult to say how Bitcoin will behave this time. If the cryptocurrency entered a period of active growth after the halving, it increased intensively before this time. Active positive dynamics were triggered by the US Securities and Exchange Commission (SEC), which in January approved the listing of bitcoin ETF spot funds that allow traditional stock exchange participants to play on the price of the cryptocurrency without buying it. As a result, Bitcoin reached its all-time high of $73,797.68 on March 14, 2024, and is currently trading around $64,000, 13% below its all-time high.

Before the emergence of the Bitcoin ETF, its peculiar analogues on the stock exchanges were shares of mining companies that reacted to fluctuations in the prices of the largest cryptocurrency. Many showed 300-600% growth in 2023, but a double-digit decline from the beginning of 2024: for example, the price of Riot Platforms rose 356% in 2023 and lost around 41% in 2024.