Total of 19 mn Bitcoins mined, pushing price upward 

Bitcoin mining hit a 19 million milestone in recent days, leading to a jump in its price. 

Tokyo-based SBI Crypto Co., under the parent company of SBI Holdings Inc., mined the 19 millionth Bitcoin, according to Cointelegraph on Sunday. The latest development leaves only two million more Bitcoins to be mined. 

The price of Bitcoin surged as much as 38% on Monday from Jan. 24, when it hit the lowest level so far this year. The cryptocurrency’s price hovered around $46,727 per coin on Tuesday.

Much like in the mining of precious metals, there is a cap on how many Bitcoins can be mined. Experts forecast 99% of Bitcoins will be mined by 2030, with the 21 millionth to be mined in 2140. 

MINING & HALVING 

So what does "Bitcoin mining" even mean?

It refers to the process of creating new Bitcoins by solving mathematical puzzles. The process requires computer systems equipped with specialized chips, consuming 1,173 kilowatt hours of electricity per coin. 

As the number of completed Bitcoin grows, mining productivity falls.

Bitcoin halving is when the payout for mining a new block is halved; and this happens after every 210,000 blocks or roughly every four years. 

Back in 2009 when Bitcoin was first launched, each block contained 50 BTC.

There have been three halving events, and a block now only contains 6.25 BTC. When the next halving occurs, a block will have only 3.125 BTC.

Following the halving events, the price of Bitcoin rose in 2016 and 2020. Each price hike continued for about a year.

The next Bitcoin price jump is expected in Spring 2024. 

When the halving happens, the supply of Bitcoin naturally decreases. That pushes the price of Bitcoin upward. 

The research center of Korbit Inc., the operator of South Korea’s first Bitcoin exchange, introduced a valuation method based on mining data. 

“Projecting price changes based on mining data is a tried and true method in precious metal investment” the Korbit research explained. 

Head of Korbit research center Jung Seok-moon cautioned, however, that other factors may have played bigger roles as Bitcoin halving is a widely expected phenomenon. 

BULLISH FOR YEARS

Despite the decreasing number of available Bitcoins left to mine, the number of investors keen to mine them is rising. 

And this could be the main reason behind the price hike. The more people enter the mining race, the more challenging it gets. 

“The fact that miners have increased their efforts despite the rising cost is testament to their expectations of Bitcoin's price rising for the next four to five years,” Hoon-jong, COO and co-founder of DA Ground Co. said. 

The company operates digital asset trading platform SandBank.

Bitcoin mining companies typically hold their creations for the long term as opposed to selling them on exchange platforms. 

When Beijing banned all domestic crypto mining last June, the decision sent the price tumbling to below $36,000 per BTC. 

China was the first country to prohibit its financial institutions from engaging in any crypto transactions in May 2021.

After Beijing outlawed cryptocurrencies outright last September, Bitcoin mining companies made a mass exodus from China to the United States and the difficulty of mining returned the previously high levels.  

Write to Jin-Woo Park at jwp@hankyung.com
Jee Abbey Lee edited this article.