One of the ways a cryptocurrency’s value is protected is with a cap on supply. Compare this to a traditional currency like the U.S. Dollar (USD), which does not have a limit on supply. Governments can print more USD at any given time, but when too much enters circulation, the USD easily loses value.
Bitcoin (BTC), on the other hand, has a maximum supply of 21,000,000, meaning there will never be more than 21 million bitcoins in circulation at any given time.
To keep the maximum supply fixed, the circulating supply of Bitcoin gets cut in half once it reaches a certain threshold. These halving events happen every four years or so – and historically, they’ve had massive effects on the price of Bitcoin.
We’ve seen three halving events since Bitcoin’s inception, and each was a catalyst that sent the price of BTC through the roof.
The earliest Bitcoin halving happened in November 2012. The price of BTC at the time averaged around $11. By November 2013, the price of BTC had surpassed $1,000.
The next halving event was triggered in July 2016; at the time, the price of BTC averaged between $600 to $700. By December of 2017, Bitcoin had surged to near $20,000.
The third halving, in May 2020, saw BTC go from around $10,000 to upwards of $60,000 by May 2021.
Here’s where we need your undivided attention now.
Because this time, it’s Ethereum (ETH) with a halving event on the horizon. And this isn’t just any old halving we’re talking about.
This is the Ethereum triple halving – a historic event that’s going to make those Bitcoin halvings look like child’s play.
The Roadmap to Ethereum’s Triple Halving
First, it’s important to understand that Ethereum was built on the same proof-of-work (PoW) mechanism first pioneered by Bitcoin, which uses mining to validate new transactions, add them to the blockchain, and generate new tokens.
The problem with this PoW network is that it wastes major computing capacity and slows down transactions due to the nature of mining coins, which is incredibly energy-consuming.
Not only are there ecological concerns around this, but the PoW mechanism also demands an ever-increasing amount of time per puzzle, making the blockchain slow and inefficient in critical situations like sudden price fluctuations.
An optional form of permission that consumes less power, manages volatility, and improves security has been an urgent need for users, developers, and investors in the cryptocurrency space for years.
To help address the flaws in its network, Ethereum has introduced a number of exciting upgrades that will make it more sustainable, secure, and scalable. The end goal is for Ethereum to make a full transition to a proof-of-of-stake (PoS) network.
Its London Hard Fork upgrade, launched in August 2021, introduced EIP-1559 (EIP stands for Ethereum Improvement Proposal) to help improve Ethereum’s notoriously high gas fees.
The Merge upgrade, which is expected to roll out in the second quarter of 2022, is the one that will represent the official switch to proof of stake – after which the Ethereum mining era will no longer exist.
When The Merge happens, and Ethereum makes the full transition to proof of stake, it will cause an issuance shock. Together, the EIP-1559 upgrade and ETH issuance will trigger a cliffening (or drop off), where a large percentage of gas fees will be burned. And as a result, ETH will drop from 15k ETH a day to 1.5 ETH a day in the biggest catalyst of all – the Ethereum triple halving.
This triple halving is set to unfold in September, and will be the equivalent of three Bitcoin halvings.
You saw how significant a single Bitcoin halving was for the price of BTC.
Well, this triple halving, with three times the power, has the potential to lead to a price explosion so huge that ETH could even overtake BTC in market cap.
You’ll want to be in position to take full advantage of this opportunity before that happens.
Ethereum is one of the core cryptos in Chief Crypto Strategist Nick Black‘s starter portfolio, so if you’ve been following him on American Institute for Crypto Investors LIVE, you’re already ahead of the game.
And as more details about this crypto catalyst unfold, American Institute for Crypto Investors will be here to guide you. Stay tuned as we prepare you with the best value in this space on your crypto investment journey.
In the meantime, find out how to build a perfectly balanced crypto portfolio – including Ethereum – with this go-to formula from Nick.
Even better: Click here to access the full Alternative Wealth Network model portfolio of hand-picked crypto trade recommendations from our team of experts. (Not a member? Go here now to join and get immediate access.)
The Alternative Wealth Daily Research Team