In April 2025, Bitcoin will experience a crucial event for its ecosystem: halving. This phenomenon will halve the rewards given to miners for each block they validate, which will directly impact both supply and demand for the cryptocurrency.
But what does this mean in simpler terms and how could it affect investments, especially in Latin America? Here we explain the details.
What is Bitcoin Halving?
Bitcoin halving is a scheduled event that occurs approximately every 4 years, in which the reward for mining a block of Bitcoin is halved.
Originally, miners received 50 BTC for each block, but this amount has been reduced as time progresses:
- 2012: 50 BTC
- 2016: 25 BTC
- 2020: 12.5 BTC
- 2024: 6.25 BTC
And in 2025, the reward will be reduced to 3,125 BTC per block.
This event is fundamental because it not only regulates the issuance of new bitcoins, but also acts as a check on inflation.
According to Bitcoin's design, the total amount of BTC will never exceed 21 million, so halving ensures that the supply is gradually reduced as time progresses.
The impact on supply and demand
The halving of 2025 will have a double impact on Bitcoin supply and demand:
- Lower BTC supply: As the mining reward is reduced, fewer BTC are issued each day. This lowers the inflation rate of the cryptocurrency and makes existing bitcoins theoretically scarcer. Scarcity, in markets such as crypto, can lead to an increase in value if demand is sustained or growing.
- Potential increase in demand: Scarcity usually generates expectations that Bitcoin's value will rise. Historically, after previous halvings, the price of BTC has increased significantly in the following months. This perception of "scarcity" can incentivize investors to buy more before the price rises, which increases demand.
What to Expect in 2025?
Although there are no certainties, analysts and experts agree that the halving of 2025 could generate a series of notable changes in the Bitcoin market, especially in LATAM:
- Price impactIf we follow the trend of previous halvings, an increase in the price of BTC could be expected after the event. This occurs because the reduction in the mining bounty makes Bitcoin perceived as more valuable with less supply available.
However, price behavior is not always predictable, and external factors such as regulation in LATAM, technological adoption or even changes in the global macroeconomy can influence results.
- Opportunities for LATAMLatin America has been one of the fastest growing regions in the use of cryptocurrencies, especially Bitcoin. Halving could lead more people in LATAM to seek BTC as a hedge against local inflation or as an investment vehicle.
In addition, as the mining bounty decreases, some miners could face difficulties to continue operating, which could affect infrastructure in countries such as Argentina or Venezuela, where crypto mining has been popular due to their low energy costs.
- Increased institutional interestAs Bitcoin's scarcity becomes more apparent, large institutional investors could once again turn their sights on the cryptocurrency as a safe haven investment. This could mean greater stability and growth potential for years to come.
The reality in LATAM
LATAM has a very particular context when it comes to cryptocurrencies. With economies in constant fluctuation, high inflation and a great distrust in local currencies, many Latin Americans have seen in Bitcoin a refuge and an option to diversify their investments.
However, the lack of regulation and the volatility of the currency still pose significant risks. Despite this, the 2025 halving could consolidate Bitcoin as an increasingly attractive option for Latin American investors.
The Bitcoin halving of 2025 is not just a technical event, but has deeper implications on the supply and demand of the cryptocurrency. While the reduction in the mining bounty may generate expectations of greater scarcity, it could also alter market dynamics, especially in a region like LATAM.
For investors, this is a key time to watch and understand how market forces will react to halving and how they can take advantage of opportunities in the Bitcoin market.
If you are considering investing in Bitcoin or simply want to understand how this event may influence your finances, it is important to stay informed and prepared for the changes that could come.
Source: LATAM Fintech.
