The fourth Bitcoin halving has taken place, and it was unique in several ways. For the first time, institutional investment played a significant role in the halving. Historically, Bitcoin halvings have been followed by a spike in BTC price, and while it remains to be seen if this will happen again, there are already notable differences in the Bitcoin halving of 2024.
Since the previous halving in May 2020, the global crypto user base has grown by at least 400 million users. In 2020, there were around 100 million crypto owners worldwide, but by the end of 2023, this number had risen to as high as 580 million people. Interestingly, while Bitcoin is the largest cryptocurrency, it has fewer users than the entire crypto ecosystem. Only around 2.7% of the global population is estimated to own Bitcoin in 2024, up from 71 million users four years ago.
Unlike previous halvings, where Bitcoin price broke out after the event, the price experienced extraordinary growth before the halving in 2024. Bitcoin reached an all-time high of $73,600 on March 13, 2024, just before the halving took place. This is a new trend that has not been seen before, and it has had a positive impact on miners. Miners are in better shape this time around, with lower levels of debt and better control over costs. The price appreciation before the halving has also benefited miners, something that was not seen in previous cycles.
Bitcoin mining energy consumption has increased significantly since the third halving in 2020, but the amount of energy powered by renewable sources has also increased. As of January 2024, renewables accounted for 54.5% of Bitcoin mining consumption. This is a positive development for the sustainability of Bitcoin mining.
The 2024 halving is also significant because it is the first halving with BTC exchange-traded funds (ETFs) enabled in the United States. Spot Bitcoin ETFs have seen tremendous success, attracting institutional investors and increasing demand for Bitcoin. Since their debut in January 2024, spot Bitcoin ETFs have increased their holdings by at least 220,000 BTC, worth around $14 billion.
Bitcoin has also become more globally decentralized and secure. Chinese dominance in Bitcoin mining has decreased, with the United States now accounting for 40% of the total hashrate. The Bitcoin blockchain has also become more resistant to attacks, as its hash rate has surged five times since the previous halving.
The Bitcoin halving of 2024 has seen institutional investment, a growing user base, price appreciation before the halving, improved mining conditions, the introduction of BTC ETFs in the US, and increased network security and decentralization. These factors will shape the future of the Bitcoin market.
So what if the global crypto user base has grown? It doesn’t mean the Bitcoin halving is any more important.