Miners on the Bitcoin network experience a decrease in rewards for the fourth time through 'halving'.

On Friday evening, the Bitcoin network underwent its fourth "halving," resulting in a reduction of miner rewards from 6.25 to 3.125 bitcoins.

Bitcoin's price has fluctuated before the event and decreased by approximately 4% this week, trading at around $64,100, according to Coin Metrics.

The upcoming halving of bitcoin is not expected to affect its price in the short term, but many investors anticipate significant gains in the months ahead based on its past performance after previous halvings. Following the 2012, 2016, and 2020 halvings, the bitcoin price increased by approximately 93x, 30x, and 8x, respectively, from its halving day price to its cycle top.

The event is a big test for mining companies, however.

Reginald Smith, a JPMorgan analyst, stated in a recent note to investors that if all else remains equal, halving industry revenues will lead to a wave of consolidation and business closures, while also rationalizing the network hashrate and industry capex, which will ultimately benefit the remaining operators.

The greater a miner's hash rate, the greater the revenue opportunity it has on the bitcoin network.

In the days leading up to the event, mining stocks have been volatile, with many down by double digits for the year. For example, is down about 41% in 2024 through Friday's close, but it surged 356% in 2023.

"Gautam Chhugani, a Bernstein analyst, stated that the market has viewed bitcoin mining stocks as mere proxies for BTC, with the absence of ETFs. He added that the upcoming halving would distinguish the low-cost, high-scale winners from the smaller miners who may face disadvantages post-halving."

Despite the halving, speculators may continue to trade on the event. JPMorgan analyst Nikolaos Panigirtzoglou predicts that the near-term bitcoin price will decline after the halving due to overbought conditions and prices that are still above the cryptocurrency's comparison to gold when adjusted for volatility. Additionally, he notes subdued venture capital funding of crypto projects.

Analysts at Deutsche Bank have a similar view.

"Bitcoin's halving is already factored into the market, and we don't anticipate a significant price increase after the event, according to Marion Laboure of the firm, who added that the anticipation of the Bitcoin algorithm has been widely known in advance."

She stated that prices will remain high in the future due to anticipated spot Ethereum ETF approvals, central bank rate cuts, and regulatory developments.

Bitcoin is currently trading at approximately $57,000, which is about 12% below its March 14 record high of $73,797.68.