Bitcoin's latest 'halving' has arrived. Here's what you need to know

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Bitcoin's latest 'halving' has arrived. Here's what you need to know

2024-04-20 08:58 Last Updated At：09:00

NEW YORK (AP) — The “miners” who chisel bitcoins out of complex mathematics are taking a 50% pay cut — effectively reducing new production of the world’s largest cryptocurrency, again.

Bitcoin's latest “halving" occurred Friday night. Soon after the highly anticipated event, the price of bitcoin held steady at about $63,907.

Now, all eyes are on what will happen down the road. Beyond bitcoin’s long-term price behavior, which relies heavily on other market conditions, experts point to potential impacts on the day-to-day operations of the asset’s miners themselves. But, as with everything in the volatile cryptoverse, the future is hard to predict.

Here’s what you need to know.

Bitcoin “halving,” a preprogrammed event that occurs roughly every four years, impacts the production of bitcoin. Miners use farms of noisy, specialized computers to solve convoluted math puzzles; and when they complete one, they get a fixed number of bitcoins as a reward.

Halving does exactly what it sounds like — it cuts that fixed income in half. And when the mining reward falls, so does the number of new bitcoins entering the market. That means the supply of coins available to satisfy demand grows more slowly.

Limited supply is one of bitcoin’s key features. Only 21 million bitcoins will ever exist, and more than 19.5 million of them have already been mined, leaving fewer than 1.5 million left to pull from.

So long as demand remains the same or climbs faster than supply, bitcoin prices should rise as halving limits output. Because of this, some argue that bitcoin can counteract inflation — still, experts stress that future gains are never guaranteed.

Per bitcoin’s code, halving occurs after the creation of every 210,000 “blocks” — where transactions are recorded — during the mining process.

No calendar dates are set in stone, but that divvies out to roughly once every four years.

Only time will tell. Following each of the three previous halvings, the price of bitcoin was mixed in the first few months and wound up significantly higher one year later. But as investors well know, past performance is not an indicator of future results.

“I don’t know how significant we can say halving is just yet,” said Adam Morgan McCarthy, a research analyst at Kaiko. “The sample size of three (previous halvings) isn’t big enough to say ‘It’s going to go up 500% again,’ or something.”

At the time of the last halving in May 2020, for example, bitcoin’s price stood at around $8,602, according to CoinMarketCap — and climbed almost seven-fold to nearly $56,705 by May 2021. Bitcoin prices nearly quadrupled a year after July 2016’s halving and shot up by almost 80 times one year out from bitcoin’s first halving in November 2012. Experts like McCarthy stress that other bullish market conditions contributed to those returns.

Friday's halving also arrives after a year of steep increases for bitcoin. As of Friday night, bitcoin’s price stood at $63,907 per CoinMarketCap. That’s down from the all-time-high of about $73,750 hit last month, but still double the asset’s price from a year ago.

Much of the credit for bitcoin’s recent rally is given to the early success of a new way to invest in the asset — spot bitcoin ETFs, which were only approved by U.S. regulators in January. A research report from crypto fund manager Bitwise found that these spot ETFs, short for exchange-traded funds, saw $12.1 billion in inflows during the first quarter.

Bitwise senior crypto research analyst Ryan Rasmussen said persistent or growing ETF demand, when paired with the “supply shock” resulting from the coming halving, could help propel bitcoin’s price further.

“We would expect the price of Bitcoin to have a strong performance over the next 12 months,” he said. Rasmussen notes that he’s seen some predict gains reaching as high as $400,000, but the more “consensus estimate” is closer to the $100,000-$175,000 range.

Other experts stress caution, pointing to the possibility the gains have already been realized.

In a Wednesday research note, JPMorgan analysts maintained that they don’t expect to see post-halving price increases because the event “has already been already priced in” — noting that the market is still in overbought conditions per their analysis of bitcoin futures.

Miners, meanwhile, will be challenged with compensating for the reduction in rewards while also keeping operating costs down.

“Even if there’s a slight increase in bitcoin price, (halving) can really impact a miner’s ability to pay bills,” Andrew W. Balthazor, a Miami-based attorney who specializes in digital assets at Holland & Knight, said. “You can’t assume that bitcoin is just going to go to the moon. As your business model, you have to plan for extreme volatility.”

Better-prepared miners have likely laid the groundwork ahead of time, perhaps by increasing energy efficiency or raising new capital. But cracks may arise for less-efficient, struggling firms.

One likely outcome: Consolidation. That’s become increasingly common in the bitcoin mining industry, particularly following a major crypto crash in 2022.

In its recent research report, Bitwise found that total miner revenue slumped one month after each of the three previous halvings. But those figures had rebounded significantly after a full year — thanks to spikes in the price of bitcoin as well as larger miners expanding their operations.

Time will tell how mining companies fare following this latest halving. But Rasmussen is betting that big players will continue to expand and utilize the industry’s technology advances to make operations more efficient.

Pinpointing definitive data on the environmental impacts directly tied to bitcoin halving is still a bit of a question mark. But it’s no secret that crypto mining consumes a lot of energy overall — and operations relying on pollutive sources have drawn particular concern over the years.

Recent research published by the United Nations University and Earth’s Future journal found that the carbon footprint of 2020-2021 bitcoin mining across 76 nations was equivalent to emissions of burning 84 billion pounds of coal or running 190 natural gas-fired power plants. Coal satisfied the bulk of bitcoin’s electricity demands (45%), followed by natural gas (21%) and hydropower (16%).

Environmental impacts of bitcoin mining boil largely down to the energy source used. Industry analysts have maintained that pushes towards the use of more clean energy have increased in recent years, coinciding with rising calls for climate protections from regulators around the world.

Production pressures could result in miners looking to cut costs. Ahead of the latest halving, JPMorgan cautioned that some bitcoin mining firms may “look to diversify into low energy cost regions” to deploy inefficient mining rigs.

UCLA faces criticism for failure to act to stop attack on pro-Palestinian encampment

2024-05-02 10:24 Last Updated At：10:31

LOS ANGELES (AP) — Administrators and campus police at UCLA faced intense criticism Wednesday for failing to act quickly to stop an attack on a pro-Palestinian encampment on campus by counter-demonstrators who threw traffic cones and chairs, released pepper spray and tore down barriers.

Some pro-Palestinian demonstrators fought back, and skirmishes continued for hours before outside law enforcement agencies were called to intervene. No one was arrested, and at least 15 protesters suffered injuries in the confrontation, part of a recent spate of escalating violence that's occurring on some college campuses nationally over the Israel-Hamas war.

“The community needs to feel the police are protecting them, not enabling others to harm them,” Rebecca Husaini, chief of staff for the Muslim Public Affairs Council, said in a news conference on the Los Angeles campus later Wednesday, where some Muslim students detailed the overnight events.

The call for more police intervention at UCLA stood in stark contrast to other campuses across the U.S., where officers' actions were strongly condemned. At the University of Wisconsin in Madison, activists clashed with police officers who destroyed their tents early Wednesday.

The chaotic scenes unfolded early Wednesday after police burst into a building occupied by anti-war protesters at Columbia University on Tuesday night, breaking up a demonstration that had paralyzed the New York school.

An Associated Press tally counted at least 38 times since April 18 where arrests were made at campus protests across the U.S. More than 1,600 people have been arrested at 30 schools.

UCLA Chancellor Gene Block said in a statement that “a group of instigators” perpetrated the attack, but he did not provide details about the crowd or why the administration and school police did not act sooner.

“However one feels about the encampment, this attack on our students, faculty and community members was utterly unacceptable,” he said. “It has shaken our campus to its core.”

Block promised a review of the night's events after California Gov. Gavin Newsom and the Los Angeles mayor denounced the delays.

Speakers disputed the university’s account that 15 people were injured and one hospitalized, saying the number of people taken to the hospital was higher. One student described needing to go to the hospital after being hit in the head by an object wielded by counter-protesters.

Several students who spoke during the news conference said they had to rely on each other, not the police, for support as they were attacked, and that many in the pro-Palestinian encampment remained peaceful and did not engage with counter-protesters.

UCLA canceled classes Wednesday. In the evening, hundreds of supporters of the pro-Palestinian protesters, including students and alumni, stood on campus steps beyond the encampment while law enforcement presence grew. A small group of students holding signs and wearing T-shirts in support of Israel and Jewish people gathered nearby.

Metal and wooden barriers had been restored around the tent encampment after the scuffle hours earlier. Overhead TV cameras showed people within the enclosure distributing goggles, helmets and other gear as well as medical assistance tents that had been set up later in the day.

Ray Wiliani, who lives near UCLA, said he came to the campus Wednesday evening to support the pro-Palestinian demonstrators.

“We need to take a stand for it,” he said. “Enough is enough.”

Tent encampments of protesters calling on universities to stop doing business with Israel or companies that support the war in Gaza have spread across campuses nationwide in a student movement unlike any other this century. The ensuing police crackdowns echoed actions decades ago against a much larger protest movement protesting the Vietnam War.

In Madison, a scrum broke out early Wednesday after police with shields removed all but one tent and shoved protesters. Four officers were injured, including a state trooper who was hit in the head with a skateboard, authorities said. More tents sprang up within hours. More than 30 people were initially detained, but police said only four were charged with battering law enforcement.

This is all playing out in an election year in the U.S., raising questions about whether young voters — who are critical for Democrats — will back President Joe Biden's reelection effort, given his staunch support of Israel.

In rare instances, university officials and protest leaders struck agreements to restrict the disruption to campus life and upcoming commencement ceremonies.

At Brown University in Rhode Island, demonstrators closed their encampment Tuesday after administrators agreed to consider a vote to divest from Israel in October — apparently the first U.S. college to agree to such a demand.

The nationwide campus demonstrations began at Columbia on April 17 to protest Israel’s offensive in Gaza after Hamas launched a deadly attack on southern Israel on Oct. 7. Militants killed about 1,200 people, most of them civilians, and took roughly 250 hostages. Vowing to stamp out Hamas, Israel has killed more than 34,000 Palestinians in the Gaza Strip, according to the Health Ministry there.

Late Tuesday, New York City police officers entered Columbia's campus and cleared a tent encampment, along with Hamilton Hall, where a stream of officers used a ladder to climb through a second-floor window, and police said protesters inside presented no substantial resistance.

The demonstrators had seized the Ivy League school building about 20 hours earlier, ramping up their presence on the campus from a tent encampment that had been there for nearly two weeks.

They encountered police clearing tents early on, as well as more than 100 arrests and threats of suspension unless they abandoned the encampment Monday. Instead, protesters took over Hamilton Hall early Tuesday, carrying in furniture and metal barricades.

New York City Mayor Eric Adams blamed “outside agitators” on Wednesday for leading the demonstrations and repeatedly cited the presence of a woman on Columbia’s campus whose husband Adams said had been “convicted for terrorism." The woman, Nahla Al-Arian, wasn’t on Columbia’s campus this week and isn’t among the protesters who were arrested.

Al-Arian, a retired elementary school teacher, told The Associated Press that Adams misstated both her role in the protests and the facts about her husband, Sami Al-Arian, a prominent Palestinian activist. Nahla Al-Arian said she did go to Columbia for one day on April 25 to see the protest encampment there but left after she got tired.

Blocks away from Columbia, at The City College of New York, video footage showed officers forcing some protesters to the ground late Tuesday and shoving others as they cleared the street and sidewalks.

Close to 300 protesters were arrested in the crackdowns at Columbia and City College, officials said.

Meanwhile, protest encampments elsewhere were cleared by the police, resulting in arrests, or closed up voluntarily at schools across the U.S., including Fordham University in New York, Portland State in Oregon, Northern Arizona University in Flagstaff, Arizona and Tulane University in New Orleans.

Israel and its supporters have branded the university protests antisemitic, while Israel’s critics say it uses those allegations to silence opposition. Although some protesters have been caught on camera making antisemitic remarks or violent threats, organizers of the protests, some of whom are Jewish, say it is a peaceful movement aimed at defending Palestinian rights and protesting the war.

An earlier version of this story incorrectly stated that New York City Mayor Eric Adams said a woman on Columbia’s campus had been “convicted for terrorism.” Adams said that about the husband of a woman who had been on campus.

Offenhartz and Frederick reported from New York. Associated Press journalists around the country contributed to this report, including John Antczak, Christopher L. Keller, Lisa Baumann, Cedar Attanasio, Jonathan Mattise, Stefanie Dazio, Jae C. Hong, Colleen Long, Karen Matthews, Sarah Brumfield, Carolyn Thompson, Philip Marcelo, Corey Williams and Felicia Fonseca.