Price largely stable

Bitcoin: long-awaited “halving” has been completed

Bitcoin is the best-known and most important cryptocurrency.

(Bild: EXPA Pictures. Alle Rechte vorbehalten. // EXPA Pictures. All rigths reserved.)

Bitcoin, the most important cryptocurrency, has hardly changed following the highly anticipated production cutback - the "halving". The price was at 63,542 dollars around midday (CEST) on Saturday, down 0.5 percent. Experts such as Chris Gannatti from WisdomTree had described the phenomenon, which is scheduled to occur roughly every four years, as "one of the biggest events in the crypto world this year". There had been speculation about a price increase in the run-up to the event.

Enthusiasts pointed to the limitation of the Bitcoin supply to prevent inflation. Critics, on the other hand, spoke of a simple technical change that was being hyped up by speculators to drive up the price.

Halving - literally "halving" - involves reducing the production of new Bitcoin. In this form of cryptocurrency, the details of a transaction are stored in encrypted data blocks one after the other. Users provide computing capacity so that these processes can be checked. This incurs costs for them, for example for electricity. As a reward, they receive newly created Bitcoin - a process known as "mining". To prevent inflation with Bitcoin, the maximum number of digital coins was limited to 21 million from the outset.

Bitcoin production is becoming increasingly expensive
Halving is the mechanism that ensures that this limit is not exceeded. After 210,000 newly created digital coins, the reward for miners is halved. If the costs remain unchanged, this makes the step financially less attractive and thus reduces Bitcoin production. There are currently around 19 million Bitcoin in circulation, with the maximum amount expected to be reached in 2140. The exact time of a halving is therefore not technically fixed. So far, halvings have occurred every four years - in 2012, 2016, 2020 and now on Friday.

In previous halvings, the Bitcoin price subsequently rose. After the throttling on May 11, 2020, for example, the price rose by around 12% in the following week and by 659% in the following twelve months. In July 2016, the Bitcoin price rose by around 1.3% the next week, but fell again a few weeks later before rising again. Some observers see a causality: as the supply of Bitcoin is no longer growing as strongly, this is a shortage that is leading to a higher price. Skeptics, on the other hand, argue that the halving is already priced in as a foreseeable step.