Every four years, a monumental event happens in the realm of cryptocurrencies, Bitcoin halves. But what exactly does this mean? In simple terms, Bitcoin miners who validate transactions on the Bitcoin blockchain will see their rewards cut in half, whereas if they used to get 6.25 Bitcoin for validating a transaction, they’ll get 3.125 Bitcoin. Now the rationale for these quadrennial halving events, which are written into Bitcoin’s original code, is to reduce the supply of Bitcoin entering circulation. The underlying basis is that it avoids inflation and keeps its value thanks to the invention of having the number of Bitcoins that will ever exist capped at 21 million.
A natural question to ask is: what are the investment implications of this Bitcoin halving event? This article will provide some insight into this market event and what impact it will have on Bitcoin ETFs.
