What does halving mean for Bitcoin?

Bitcoin cracked highs of $69,000 USD this week, rising 50% in less than two months after the approval of U.S. Bitcoin spot ETFs in January.

However, there's more to the Bitcoin rally, with Bitcoin halving expected to commence mid April. The halving will lower the mining reward from 6.25 to 3.125 bitcoins per block.

Bitcoin halving occurs approximately every four years and reduces the rate at which new bitcoins are created by 50%, and was written into Bitcoin’s code to ensure scarcity and safeguard from inflation - with a capped supply of 21 million.

In the past, after the second ever halving in 2016, its price went from around $650 to almost $20,000 in 2017. More recently, after the third halving in 2020, Bitcoin's price shot up from around $9,000 to over $57,000 in 2021.

While there is a history of Bitcoin going up a halving event due to supply and demand, there are some other things to consider.

Bitcoin is very volatile, and this volatility could increase after it is halved, so it is important to factor in all the risks.

On top of this, there may be consolidation within the bitcoin mining industry, with lower block rewards resulting possibly causing some miners to cease operations.