W Power 2024

Bitcoin's fourth halving completed, coinciding with a surge in transaction fees

Bitcoin users collectively spent 37.7 BTC in fees, equivalent to over $2.4 million at current prices

Shashank Bhardwaj
Published: Apr 22, 2024 02:34:31 PM IST
Updated: Apr 22, 2024 02:55:39 PM IST

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Bitcoin underwent its fourth halving at 12:09 am UTC on April 20, 2024, a pre-programmed adjustment that occurs every four years to manage the cryptocurrency's supply. This event reduces the mining reward by half, which directly impacts Bitcoin miners' profitability. Historically, halving events have preceded substantial increases in Bitcoin's price, as the reduced supply leads to increased demand for new bitcoins.

Bitcoin halving is an automatic adjustment to the reward miners receive for verifying transactions and adding them to the blockchain. Initially set to distribute 50 bitcoins per block, this reward halves every 210,000 blocks. The latest halving reduced the reward from 6.25 to 3.125 bitcoins per block. This ensures that the total supply of Bitcoin caps at 21 million. Notably, as of April 2024, there were approximately 19.69 million bitcoins in circulation, with only around 1.31 million yet to be released through mining rewards.

The Bitcoin block 840,000, marking the fourth-ever Bitcoin halving, saw a surge in network fees as many users competed for limited space. Consequently, Bitcoin users collectively spent 37.7 BTC in fees, equivalent to over $2.4 million at current prices, to secure transactions within this block.

Considering the event, several Bitcoin mining firms listed on the Nasdaq stock exchange closed the trading week with a noticeable 24-hour increase in share prices in the lead-up to the Bitcoin halving event. Additionally, Riot Platforms (RIOT) saw the most significant growth among publicly listed Bitcoin mining firms on the April 19 trading day, with its stock price increasing by 10.13 percent to $9.13.

The Bitcoin halving hype has led to a break in the week-long ETFs outflow streak, with a net positive inflow recorded in the United States exchange-traded funds (ETFs) market right before the Bitcoin halving day. This was due to anticipation of an increase in market value post-halving, leading to investment strategies worldwide recommending the addition of Bitcoin to existing portfolios.

As of April 22, the price of Bitcoin stood at $66,136, an increase of 1.76 percent in the last 24 hours.

Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash