The fourth Bitcoin halving has concluded, and it was unlike any previous halving due to the involvement of institutional investors for the first time. Historically, Bitcoin halvings have been associated with a subsequent increase in BTC price, typically occurring after some time post-halving. While it remains to be seen if the fourth halving will follow the same pattern, there are already notable differences in the Bitcoin halving of 2024.
Since the first halving, the rate of new Bitcoin generation has decreased, but the demand has continued to grow. The global crypto user base has expanded by at least 400 million users since the previous halving in May 2020. In 2020, there were approximately 100 million crypto owners worldwide, according to the Cambridge Centre for Alternative Finance (CCAF). By the end of 2023, this number had surged to an estimated 580 million people, as reported by crypto exchange Crypto.com.
Despite Bitcoin being the largest cryptocurrency by market capitalization and the oldest, it appears to have fewer users compared to the entire crypto ecosystem. Technopedia data suggests that around 2.7% of the global population owns Bitcoin in 2024, which amounts to approximately 219 million people. This figure represents a significant increase of around 208% from the 71 million Bitcoin users four years ago.
Estimating the exact number of Bitcoin users is challenging due to factors such as long-term holders, lost BTC, and other variables that on-chain transaction analysis cannot differentiate. However, it is clear that the number of Bitcoin users has grown significantly in recent years.
One notable difference in the fourth Bitcoin halving is the unprecedented growth in price before the event. In previous cycles, Bitcoin price breakouts occurred after the halving, and new all-time highs were reached approximately one year later. For example, Bitcoin did not surpass its previous all-time high of $20,000 before the 2020 halving. It took another 10 months for the price to exceed that level. However, in the current cycle, Bitcoin reached its all-time high of $73,600 just before the halving on March 13, 2024.
This pre-halving price breakout is unprecedented and has caught the attention of analysts, including eToro’s crypto analyst Simon Peters. The mining industry has potentially benefited from this price appreciation, as miners have gained more control over their costs, such as electricity, and have lower levels of debt compared to previous halvings.
Bitcoin mining energy consumption has significantly increased since the third halving, reaching 99 Twh on April 18, 2024, compared to around 50 Twh in May 2020. However, the proportion of Bitcoin network energy consumption powered by renewable energy sources has also increased, accounting for 54.5% of BTC mining consumption as of January 2024.
Another significant aspect of the Bitcoin halving in 2024 is the introduction of spot Bitcoin exchange-traded funds (ETFs) in the United States. After years of efforts, these ETFs debuted in January 2024, providing institutional investors with exposure to Bitcoin. These ETFs have experienced tremendous success, with holdings increasing by at least 220,000 BTC since their launch.
Bitcoin has also improved in terms of network security and decentralization. Mining in China, which used to account for nearly 80% of Bitcoin’s total mining hash rate, has become more distributed. Currently, the United States has the largest share of the total hashrate at 40%, followed by China and Russia at 15% and 12%, respectively. Miners are also migrating to Africa and Latin America to take advantage of cheaper electricity prices, contributing to the geographic decentralization of Bitcoin mining.
Overall, the Bitcoin halving in 2024 has brought several unique developments, from the involvement of institutional investors through spot Bitcoin ETFs to the unprecedented price growth before the event. The crypto user base has expanded significantly, and Bitcoin has become more globally decentralized and secure. These factors set the stage for an exciting future for Bitcoin and the cryptocurrency industry as a whole.