One of the most awaited event in the history and space of crypto currency is Bitcoin Halving. To many, it is a sign of bullish momentum, making money in the space from coins that they have been holding for many months. While to some, it can be disastrous, because they will fomo into the market, only to lose so much. Whichever side a person finds himself, Bitcoin halving always have an impact.

This week's crypto engagement contest is all about Bitcoin halving and it's effect on the steem token.

Let us now use the contest tips to explore this topic more.

How could the Bitcoin halving in April 2024 influence investors' general perception of cryptocurrencies, and in particular, what impact could it have on the STEEM token?

In my introduction, I mentioned that Bitcoin halving is the most important event in the crypto space. This year, it will be happening on April 2024. To many investors it marks a positive time to reap the fruitage of their investments over some years.

Many have been buying and investing into tokens hoping to reap about 20x of their investments. Investors perception about halving is generally a positive one.

Impact On Steem

We can look at it's impact on Steem during the last halving to give us an insight into what we may be expecting regarding Steem this coming halving.

The last halving took place in May 2020.

The chart below shows it all:

Before the halving took place, steem token was trading at the range of $0.20 to $0.23 per steem. When BTC halving took place, the price grew to about $0.32.

However, it took about another ten to eleven months before it created the last high for the last bull run.

Similarly, I am envisaging that the halving will bring about the retest of the last bull high price, then the price will come down before another high for the coming bull run is achieved.

What adjustments in the supply and demand dynamics of cryptocurrencies could result from the Bitcoin halving, and how could these changes influence the valuation of the STEEM token?

To understand what the effect could be, we need to understand what Bitcoin halving is.

Bitcoin halving is an event that happens when mining rewards for Bitcoin are slashed into two. Presently, the mining rewards for BTC per block is 6.25BTC. So when the halving occurs, the mining reward will reduce to half of 6.25BTC which is 3.125BTC, thus cutting their reward earning into half.

What this means is that the rate at which new BTC coin are created or mined will be reduced by half, hence bringing about less supply or available BTC in the market.

This shortage in supply will lead to higher demand and higher price simultaneously. Naturally obeying the economic law of demand and supply.

BTC is the number 1 cryptocurrency and it determines the price movement of many if not all alt coins.

So even though the reduction in supply of Bitcoin does not lead to reduction of other cryptocurrencies, the increase in its price will lead to increase in the prices of other alt coins, thus increasing the demand for those alt coins too.

Every token has its own way of reducing the quantity of coins that circulate in the market. It could be by burning, buy backs, deflationary methods, etc.

However, BTC increase in price leads investors to scramble for these alt coin, leading to increase in demand just for them to benefit from the increase in price.

So Steem token is not left out of this price rally caused by BTC. Purchase volume will definitely increase as investors wants to hold and enjoy the profits that comes from BTC halving.

How might specific characteristics of the STEEM token, such as its content-based reward mechanism, be impacted by macroeconomic changes resulting from the Bitcoin halving?

Well, Steem token is not built on BTC block chain, rather it is built on its own blockchain which is steem Blockchain. So, It has its own tokenomics, deflationary measures, how it is mined and the rewards that miners get.

Its content reward mechanism will surely be affected by the macroeconomic effects of BTC halving.

For one thing, since BTC drags prices of other cryptocurrencies along with it, then there will also be increase in price for the steem.

So this price rallying will definitely trigger higher demand for the steem token, which will lead to increased volume both in transaction, value and amount of the steem token traded.

See screenshots.

Like we noticed between 2020 and 2021, there was increased mining rate as many users engaged in publication of contents within the platform to earn Steem token. So rewards and earnings will definitely increase due to the effect of BTC halving.

What lessons can investors learn from previous Bitcoin halvings to anticipate market trends and make informed decisions regarding the STEEM token?

One of the greatest mistakes people made last halving was fomoing into the market in seeing increase in price movements. Thus most whales used them as exit liquidity and they finally sold their holdings in losses.

So I would say that now presents another opportunity to invest before price rally starts to eliminate taking wrong entries into the market. This will help them to curb their losses too.

Avoiding greed is another major lesson investors must learn. They must learn to take profit little by little and not waiting until they go home with the entire crypto market funds.

Investing what they can afford to lose is another basic lesson we can learn from halving. Hence any investment on Steem must be funds they can afford to lose without feeling the impact much.

Another lesson to learn is that BTC halving usually leads to an uptrend, and Steem token is not exempted. Thus, the earlier the better.

It will also be good to note the change after halving. The price increase after halving eclipsed after some months. The major price increase now occured about 6 months after the halving. Knowing this will help to know how to amass more profit by investing in Steem and withdrawing at the right time.

When we put and factor in these lesson learnt from past BTC halving, it can help us to make informed decisions regarding investment in Steem token.

Conclusion

Bitcoin halving is being awaited by millions of people around world. Steem token loyalists are also expecting this halving with all optimism. Imagine having such rally we had on April 2021? That would be simply awesome! Now is the best time to invest in Steem Token.

I invite @drhira @artist1111 and @steemdoctor1 to take part. The contest post is here