Bitcoin Dominance sees new heights
The power of the asset is demonstrated by the bitcoin market dominance, which is a measure of the asset's market capitalization in relation to the whole digital asset market. Over 50% market domination is seen as extremely bullish and represents the greatest level since the previous bull run back in April. In the beginning of October, when it surged from less than 49% to this new two-and-a-half-year high of 54%, Bitcoin's market dominance started to recover.
The market dominance of Bitcoin has risen to 54%, the greatest level in the previous 30 months, suggesting that the leading cryptocurrency is getting stronger right before the April 2024 halving event.
When the mining reward for Bitcoin is cut in half every block, the asset's supply is reduced in response to rising demand, which boosts the asset's price momentum. This is known as the Bitcoin halving. The mining reward for Bitcoin will drop from its current 6.25 BTC to 3.125 BTC in 2024 during the next four-year halving. The half of Bitcoin mining incentives reduces the amount of new Bitcoin that enters the market because there is a fixed quantity of 21 million coins.
What is Bitcoin Halving?
Each 4 years, or after 210,000 blocks have been mined by the network, Bitcoin miners receive a block reward that is halved. Because it reduces the amount of new bitcoins released into circulation by half, this event is known as the "halving." The proposed 21 million coin cap will be reached at some point in 2140, at which point this rewards program will end. At that point, network users will pay miners' fees in exchange for their processing of transactions. These costs guarantee that miners will continue to be motivated to contribute and maintain the network.
The reason the halving event matters is that it represents a further decline in the rate at which Bitcoin is created as its supply gets closer to being exhausted. 50 bitcoins were awarded for mining each block in the chain in 2009. Only roughly 1.5 million bitcoins remained to be released through mining awards as of October 2023, out of the approximately 19.5 million in circulation.
The bitcoin halving will have a huge impact on the overall value of bitcoin, but until then, it can be expected that many more companies will be racing to get their hands on the available bitcoin through mining. As the currency itself is limited, and there is a rapid rise in demand, the dominance of the currency can only be expected to increase. Despite having been more than 14 years since the launch of bitcoin, and the mining method, crypto enthusiasts still know that the race is far from over. As time draws near to the halving event, we will see a drastic change in bitcoin prices, and mining activity.