00:00 Welcome to Yahoo Finance Future Focus.
00:07 The Bitcoin network has just experienced another halving event.
00:11 But what exactly is it and how might it impact the price of Bitcoin?
00:17 The Bitcoin halving is a significant event in the world of cryptocurrencies that occurs
00:22 approximately every four years, and it's a fundamental part of Bitcoin's design.
00:27 Bitcoin mining involves a decentralized network of validators who verify all Bitcoin transactions.
00:33 They're rewarded with Bitcoin for their efforts.
00:37 After each halving, the number of new Bitcoin issued as a reward to miners for validating
00:42 blocks in the blockchain is halved.
00:44 So after the most recent halving, the mining reward has decreased from 6.25 Bitcoin down
00:50 to 3.125 Bitcoin.
00:55 Now why does this matter?
00:56 Well, Bitcoin has a finite supply.
00:59 There will only ever be 21 million Bitcoin.
01:01 Currently, just over 19 million have been mined, leaving less than 2 million left to
01:07 be created.
01:08 So this reduction can lead to a supply crunch for Bitcoin, potentially causing its price
01:13 to appreciate.
01:15 And this month's halving is different from prior halvings as it comes after the mainstream
01:20 acceptance of Bitcoin as a legitimate asset after the approval of multiple spot Bitcoin
01:25 exchange traded funds in January.
01:31 So if the economic theory of supply and demand holds true, which historically for Bitcoin
01:36 it has, Bitcoin prices could increase in response to the supply shock caused by the recent halving
01:42 event.
01:43 The first Bitcoin halving occurred in November 2012, and since then there have been three
01:48 more in July 2016, May 2020, and now in April 2024.
01:54 The reward or subsidy for mining started out at 50 Bitcoin per block when Bitcoin was first
02:00 released in 2009.
02:03 The amount has dropped in half each time a new halving takes place.
02:06 For instance, after the first halving, the reward for Bitcoin mining dropped to 25 Bitcoin
02:11 per block.
02:12 Now the last halving will occur in 2140, and at that point there will be 21 million Bitcoin
02:18 in circulation and no more coins will be created.
02:22 From there, miners will just be paid with transaction fees.
02:26 Now remember, this doesn't constitute financial advice, and it's essential to approach Bitcoin
02:31 investment with caution.
02:32 While past performance may indicate trends, it's not a guarantee of future results.
02:38 Thanks for joining us.
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