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A big event is about to happen in the world of bitcoin: It's called the halving

A MARTÍNEZ, HOST:

Bitcoin has been creeping into the financial universe for more than a decade. Many people may not understand it, but big banks sure do, and they see the potential for big profits. Sometime soon, bitcoin may become turbocharged thanks to an event called the halving that happens every four years and could come as soon as tomorrow. NPR's Rafael Nam has a preview.

RAFAEL NAM, BYLINE: It's an event that used to be pretty obscure, but now it's attracting a lot of attention from all kinds of people.

STEVEN LUBKA: I've talked with dairy farmers. I've talked with people that own roofing companies, housing. Like, it has spread so far.

NAM: That's Steven Lubka. He runs a bitcoin financial firm. He says excitement this time around is the highest he's ever seen. So what is this? Put very simply...

LUBKA: The supply of new bitcoin is cut in half. That is accurate.

NAM: Cut in half - half - which is where this incredibly hard-to-pronounce word, halving, comes from. And this event happens roughly every four years. Of course, this is bitcoin, and it's a little more complicated than that. We don't even know when exactly it'll happen - most likely sometime Friday. What you really need to know is this. If you cut the amount of bitcoin that's created, it should lead to higher prices. Limited supply meets increased demand. It's econ 101. And right now Lubka says demand is huge.

LUBKA: There's so many more people that are paying attention, right?

NAM: And it's soaring. Just last month, bitcoin hit a record high of over $70,000. Even big firms on Wall Street are buying into bitcoin. It's going legit. Some even see the potential to offer it as part of 401(k)s. That's why people like Steven Lubka, who owns a bitcoin financial firm, are so hopeful about the countdown to this week's event. It may just spark the kind of rally that helps bitcoin go more mainstream.

Rafael Nam, NPR News. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Rafael Nam
Rafael Nam is NPR's senior business editor.