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

News

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

News

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.

FILE - An advertisement for the cryptocurrency Bitcoin displayed on a tram, May 12, 2021, in Hong Kong. Sometime in the next few days or even hours, the “miners” who chisel bitcoins out of complex mathematics are going to take a 50% pay cut — effectively slicing new emissions of the world’s largest cryptocurrency in an event called bitcoin halving. (AP Photo/Kin Cheung, File)

FILE - An advertisement for the cryptocurrency Bitcoin displayed on a tram, May 12, 2021, in Hong Kong. Sometime in the next few days or even hours, the “miners” who chisel bitcoins out of complex mathematics are going to take a 50% pay cut — effectively slicing new emissions of the world’s largest cryptocurrency in an event called bitcoin halving. (AP Photo/Kin Cheung, File)

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Rapsody's brave new album 'Please Don't Cry' displays strength through vulnerability

2024-05-25 00:48 Last Updated At:00:50

NEW YORK (AP) — If truth has the power to set one free, then Rapsody’s new album, “Please Don’t Cry,” has removed her from emotional imprisonment and gifted her immeasurable liberation.

“People put up a mirror for me. I sat in the mirror myself…it was the beginning of healing. Heart-broke: Why do you feel like you can’t fill the void of whatever that was? Internally, why do you feel underappreciated?” questioned the three-time Grammy nominee. "And really allow myself, again, to just sit in a fire and burn. To forgive myself for some things. To accept some things. To learn to love myself."

Rapsody's not only frequently lauded by critics as the best female lyricist, but also as one of the best in the genre. After 2019’s critically-acclaimed “Eve” album, discussions by hip-hop purists erupted on social media and in barbershops near and far debating her potentially rivaling Kendrick Lamar for the lyrical throne. But the recognition hasn’t translated into the commercial success of some female peers — veterans like Nicki Minaj and Cardi B, or recent newcomers like Megan Thee Stallion, Latto or Ice Spice. But her plight isn’t unusual for rappers labeled as “continuous” or extremely lyrical, regardless of gender.

“I was looking at what everybody else was doing instead of worrying about myself,” she said, soft-spoken throughout the interview. “I’d see comments (saying), ‘She makes great music, but she’ll never make it because she’s not half-naked or she don’t have a No. 1 hit.’ And I had to realize that those are really false measurements.”

“Please Don’t Cry,” released in May, is by far the most personal of her four studio albums. Dwindling more than 350 potential songs down to the final 22 tracks, the bulk of the production comes from HIT-BOY, BLK ODYSSY and S1, and boasts star-powered features including Erykah Badu and Lil Wayne. The regal voice of Phylicia Rashad is also sprinkled throughout.

The North Carolina native began constructing the album several years ago after a painful breakup and toward the beginning of the global coronavirus pandemic. Personal tales have always lived within her music, but the foundation of her catalogue is anchored by expert lyricism and musicality.

“I’ve always thought that I was authentic. But at the same time, I realized there was a level of fear there — a fear of allowing myself to be seen completely. But at that time, I don’t even think I completely even knew who I was,” said the 41-year-old Marlanna Evans who kept Lauryn Hill’s “MTV Unplugged No. 2.0” project in heavy rotation while creating, along with an evolving Pinterest board filled with pictures and words for inspiration.

“Please Don't Cry” has a weightier R&B influence than past projects. Standout tracks include the Badu-assisted “3:AM,” the lead single “Asteroids,” “Stand Tall,” “Faith” and “God’s Light.” While her razor-sharp bars still slice on songs like “Raw” with Lil Wayne and Niko Brim, the album makes its mark by entering a new territory of unapologetic vulnerability. Rapsody touches on insecurities, not having a stronger female fanbase, family members battling dementia and speculation surrounding her sexuality.

On the surprisingly transparent “That One Time,” the past Stevie Wonder, Kendrick Lamar and J. Cole collaborator provides a rare glimpse into her love life and past transgressions.

“One time, I had an experience with a woman. But I also bring up that I was with somebody that wasn’t available,” said the Jehovah’s Witness-raised artist of her relationship with a married person, while suggesting her partner wasn't fully honest. “I make mistakes, too — things I say I would never do, and then I find myself in a situation that I’m not proud of. But in my life and the conversations I have, I know I’m not the only one.”

Bianca Edwards, vice president of marketing for Roc Nation, says the vulnerability displayed showcases Rapsody’s security in her music and herself.

“You have to be extremely confident to bare your soul and not care what people think,” said Edwards. “And on this project, I think that she bared a lot.”

Always advocating for female rappers, Rapsody has consistently rejected praise meant to criticize her peers. But while there are songs like “Look What You’ve Done” in which she rhymes, “Don’t lift me up throwin’ shade/At my sisters that made it out wit’ a-- and bass,” she also raps, “Everything look cookie cutter/We seen enough a—, that sh-- ain’t special no more” on “Diary of a Mad Bitch.”

“I see my name brought up a lot of times used to put other women down for how they choose to show up in this art and in their life, and I’m not here for that. I’m not trying to make myself the standard. I’m just trying to make myself another example of what women in hip-hop look like to bring harmony,” said Rapsody. “With ‘Diary,’ it was me making an observation of everybody looks the same…I know we’re not clones.”

But despite a profession where cosmetic enhancements are common among female rappers – along with sexually-charged lyrics that contribute to their pop stardom – the “Complexion (A Zulu Love)” artist says she's never considered altering her body.

“My question is why isn’t there space for me or others who are different from what we see on a mainstream level…why don’t we get those same opportunities?” asked the self-described tomboy who also suffers from Graves’ disease which can change physical appearance. “I never wanted to be anything other than who I was.”

Rapsody says while every artist dreams of creating a hit record, she’s not willing to compromise her musical integrity or chase songs that don’t feel natural to attract more fans.

“I think she already found her place,” said Edwards. “I work with a lot of artists, and I’ve met artists that are still trying to find themselves. That’s not Rap.”

A tour will launch in September with five European dates and a North American leg that will run through October.

“Please Don’t Cry” has fortified Rapsody's healing journey, and she’s better for it.

“Everybody asks me about this album, like ‘How you feeling?’ I say I feel really happy and I’m at peace. And this is the most free I’ve ever felt,” she said. “I’m not putting pressure on myself to be defined as success through other people’s measurements of what that looks like.”

Follow Associated Press entertainment journalist Gary Gerard Hamilton at: @GaryGHamilton on all his social media platforms.

Rapsody poses for a portrait on Tuesday, May 7, 2024, in New York. (AP Photo/Gary Gerard Hamilton)

Rapsody poses for a portrait on Tuesday, May 7, 2024, in New York. (AP Photo/Gary Gerard Hamilton)

Rapsody poses for a portrait on Tuesday, May 7, 2024, in New York. (AP Photo/Gary Gerard Hamilton)

Rapsody poses for a portrait on Tuesday, May 7, 2024, in New York. (AP Photo/Gary Gerard Hamilton)

Rapsody poses for a portrait on Tuesday, May 7, 2024, in New York. (AP Photo/Gary Gerard Hamilton)

Rapsody poses for a portrait on Tuesday, May 7, 2024, in New York. (AP Photo/Gary Gerard Hamilton)

Rapsody poses for a portrait on Tuesday, May 7, 2024, in New York. (AP Photo/Gary Gerard Hamilton)

Rapsody poses for a portrait on Tuesday, May 7, 2024, in New York. (AP Photo/Gary Gerard Hamilton)

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