Cryptocurrency: Finance expert explains rare Bitcoin halving event

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Aussie Bitcoin investors are bracing for a rare event which is set to send the value of their crypto currency soaring.

The digital token will this week experience “halving”, an event which occurs every four years when the new supply of it is cut in half.

This occurs because crypto miners receive half as many incentives to mine the currency, and reducing the available supply of tokens.

Occurring every four years, it has previously sent the value of Bitcoin surge in the aftermath.

Dr Rand Low, Bond University. Picture: Supplied

Dr Rand Low, an Associate Professor of Quantitative Finance at Bond University said he expected the value of the digital currency to increase again.

“Historically, every time we have seen halving there has then been volatility in the market and it does tend to go up,” he said.

“It will go up primarily because it is now seen (by some people) as a form of digital gold.

“This is because there is instability, war in the Middle East and inflation, so people feel they can buy bitcoin and treat it as a form of digital gold.”

Dr Low said he expected any increase in value would occur over a six-month period rather than over a matter of days, though other experts warn it may not substantially increase.

This year’s halving, expected to occur before the week’s end, will be the first since 2020.