Transaction costs explode after Bitcoin halving
Saturday morning around 1am, the quadrennial halving of Bitcoin was finally a reality. It was celebrated as if it were a solar eclipse. The festivities ranged from a multi-day festival on a Norwegian farm to get-togethers in Arnhem and Amsterdam.
Exactly when the halving would take place was unclear until the last moment, depending on all sorts of factors, such as the amount of transactions and the computer power deployed.
A halving is when the reward halves that bitcoin miners receive for ‘mining’ a new block on the blockchain.
The celebrations had been held based on the idea that halving creates programmed scarcity – after all, there are only 21 million bitcoins to distribute – and the price of Bitcoin will rise. But so far that has been bitterly disappointing.
While the price remained steady at $63,000, the expected rally did not materialize. Last weekend, the crypto market already suffered a solid blow. The price of Bitcoin fell from $71,000 to around $62,000. On Wednesday, the price even dropped below $60,000 and ended very briefly at $59,600.
A good number of speculators got out. On April 12 and 13 alone, a total of nearly $2 billion in liquidations were processed.
Geopolitical turmoil is a major factor. Gold and stocks also took a nosedive after Iran sent missiles and drones into Israel.
Along with the halving, the new Runes protocol went live. Because many users wanted to create Rune tokens on the halving block – block 840,000 – transaction fees exploded an hour after the halving.
Runes allows users to create fungible tokens. Unlike its predecessor BRC-20, Runes offers improved simplicity and security.
At time of writing one bitcoin was worth €62,287, not far off last month’s high of €66,768.
The next halving will take place in 2028.
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