(New York) A highly anticipated recurring event in the sector, the “halving”, or the halving of the reward received by “miners” who contribute to the creation of bitcoins, occurred on Friday.
” The 4e Bitcoin halving is complete! », posted the world’s leading cryptocurrency exchange platform, Binance, on its official X account (formerly Twitter). “The countdown has been reset. See you in 2028.”
Several other cryptocurrency conversion sites such as Coinbase, Crypto.com or HTX have confirmed, also on X, that the threshold had been crossed.
The generation of bitcoin works in “blocks”, each of which contains information on transactions carried out in this currency.
These blocks are “mined”, that is to say created by private actors who carry out very complex calculations and are rewarded in bitcoins.
Since the launch of the digital token in 2009, the bitcoin reward has been reduced by half once a certain quantity of this digital currency has been created.
Every 210,000 blocks “mined” or created, the “halving” occurs.
At the rate of one block mined every approximately 10 minutes, halving occurs approximately every four years.
Fixed since the previous “halving” in May 2020 at 6.25 bitcoins per block created, the reward granted to a “miner” fell on Friday to 3.125 bitcoins.
The objective of the “halving” is to control the rate of issuance of bitcoins, the total quantity of which has been defined at 21 million units by its mysterious creator (or creators) under the pseudonym of Satoshi Nakamoto.
This maximum level should be reached by 2040. More than 19 million bitcoins are already in circulation.
“By slowing down the rate at which new bitcoins are created, halving helps maintain scarcity and potentially increase the value of this cryptocurrency, assuming demand remains stable or increases,” explains Matthew Weller, analyst at Forex.com , in a note published ahead of the event.
Profitability in question
For several months, the price of the digital token has benefited from this prospect of a reduced supply, as well as the arrival on the American market of a new investment product, an index fund (ETF) indexed to the price of the bitcoin.
These ETFs have encouraged the arrival of many institutional and individual investors in the bitcoin universe, because it allows them to benefit from the evolution of the digital currency without purchasing it themselves.
Since the start of the year, bitcoin has gained more than 50%, reaching an absolute record last month at $73,797.
On Friday, the price of bitcoin did not react to the “halving”, which many analysts had anticipated, arguing that the price of the currency had already been factoring in the event for weeks.
At around 9:30 p.m. Eastern Time on Saturday (9:30 p.m. New York Time on Friday), bitcoin was up 2.48%, to $63,626.
For JPMorgan analysts, the halving of the remuneration allocated to “miners” should lead to a consolidation of the market, with the disappearance of players whose activity is no longer profitable.
They see listed companies doing well, because they can finance themselves more easily to “grow their business and invest in more efficient equipment”.
“Mining” requires, in fact, a very significant IT infrastructure, capable of carrying out the necessary calculations.
The mining technique results in colossal energy consumption, which has earned bitcoin criticism, especially since this digital currency is, for the moment at least, a speculative asset more than a transactional tool.
With the prospect of reduced margins, many specialized companies have already prepared by investing in more efficient equipment or by lowering their costs as much as possible, particularly energy costs.
Some will have to “turn off part of their machines to reduce their costs”, therefore collecting fewer bitcoins, and if “the price of bitcoin goes down, their profitability decreases” further, speculates Manuel Valente, analyst at Coinhouse, interviewed by AFP.