Bitcoin Halving & Impact on Web3 Gaming

A thought piece

Current climate
Web3 gaming has been a forerunner in the web3 space for quite some time. Even with the rise in popularity of AI, gaming has continued to be a high-achieving vertical of the blockchain industry. Now, there is a new wave of enthusiasm as the sector is poised for further growth as a ripple effect of bitcoin’s halving. The event is due to have a notable impact on the altcoin market and liquidity flowing into the sector. Many expect to see this flow into web3 gaming. 

Bitcoin halving, which happens every four years, reduces the supply of Bitcoin. Unlike previous halvings, this time round so much has changed. Bitcoin ETFs have been approved, which enables further mainstream adoption. Regulations are starting to form around cryptocurrency, trading, and digital assets. While some jurisdictions have developed their legal framework more than others, this enables mainstream acceptance and, in time, adoption.

But what does it really mean for gaming? Some say very little, while others are much more bullish about the current market conditions and the hype around bitcoin halving, along with the recently approved ETFs, and want to ensure that this interest is carried over to the biggest thing on the blockchain: gaming.

The event is predicted to have a notable impact on the altcoin market and the liquidity of cryptocurrencies. Many expect to see this flow into web3 gaming, increasing the value of web3 gaming tokens and NFTs.

We asked BGA members to share their thoughts on the potential impact of the halving on web3 gaming, starting with a comprehensive breakdown outlining the ways it could impact our sector:

Welcome to the crossroads of blockchain buzz and gaming glory! Every four years, the Bitcoin community experiences a major milestone known as Bitcoin halving. It’s not just a big deal for hodlers—it’s a game changer in the truest sense, especially for the trailblazers in Web3 gaming.

For those new to the scene, Web3 gaming is where the fun of gaming meets the frontier of blockchain tech. Games in this sphere aren’t just about zoning out after a long day. They’re dynamic platforms where you can play, earn, and own digital assets that have real value in the ‘real’ world. When Bitcoin halves, it doesn’t just tweak the economics of cryptos; it shakes up the whole ecosystem that Web3 games thrive in.

Diving into how Bitcoin halving impacts the world of Web3 gaming isn’t just for the crypto-savvy or the game developers; it’s crucial for anyone keen on where these technologies are headed. This ride goes deep into how these halvings nudge the value of digital currencies and game assets and how they can reshape the playing field of new and existing games.

What is Bitcoin Halving?
Every 210,000 blocks, Bitcoin throws a bit of a curveball to those mining it—halving the reward they get. Starting off at 50 BTC per block, this reward gets cut in half periodically to ensure that Bitcoin doesn’t just blow past its 21 million cap. Think of it like digital gold, scarce and valuable.

Each halving brings its own drama—spotlight moments, price swings, and a lot of speculative buzz. This isn’t just crypto gossip; it’s a seismic shift that ripples across all sorts of digital assets, affecting not just Bitcoin but also the tokens and altcoins circulating in the Web3 gaming realm.

Connection to Web3 Gaming: The Deeper Impact of Bitcoin Halving

The dance between Bitcoin halving and Web3 gaming is intricate because they share the same floor—the blockchain. Here’s what that looks like:

– Tokenomics and In-Game Economies: In the universe of Web3 games, tokens aren’t just in-game currency; they’re potential gold mines. Post-halving price surges in Bitcoin can elevate the entire crypto market, boosting the worth of these tokens. This ups the stakes in the gaming world, making every quest and conquest more than just fun; it’s potentially profitable.

– Investment Attraction: Halvings can shine the spotlight on crypto, luring in investors with their flashy ‘new value’ signs. For game developers, this can mean more funds to innovate, market, and expand—more cool game features, more hype, and bigger communities.

– Market Speculation and Player Engagement: The buzz around halvings can draw crowds into the crypto space, some wandering into Web3 gaming out of curiosity or to see if they can game their way to gains. This influx can energize existing games with new players and new transactions, pumping vitality into these virtual economies.

– Catalyst for Innovation: Each halving is like a new season in tech, bringing fresh ideas to life. For game devs, it’s a chance to rethink game design, sprinkle in some DeFi magic, or experiment with player-driven governance. It’s about offering gamers not just games but a stake in the game world.

– Enhanced Security and Trust: Trust is big in the gaming and crypto communities. Halvings emphasize the decentralized, secure essence of Bitcoin, aligning with the ethos of Web3 games that champion transparency and player ownership.

By understanding these connections, stakeholders in both the cryptocurrency and gaming industries can better strategize and innovate, leveraging the unique opportunities presented by Bitcoin halving to enhance and expand the Web3 gaming landscape.
Sandro Licul, Co-Founder & CBDO – The Last Monarchy 

“The Bitcoin Halving is a game-changing event for the entire web3 and crypto industry. Historically, we’ve witnessed upward trends across the industry following this event, making it a highly positive for web3 gaming.

However, I believe the most significant impact is being felt within the Bitcoin ecosystem itself. Despite being one of the largest cryptocurrencies in the world, Bitcoin had previously seen limited development within its ecosystem, largely due to capacity constraints and protocol design. It was primarily regarded as a store of value.

However, over the past year, with the introduction of Ordinals (NFTs on Bitcoin), we’ve witnessed a significant shift in narrative. This has attracted numerous builders to Bitcoin, leading to a surge in activity. In fact, Ordinals now surpass even Ethereum NFTs in trading volume.

In addition to Ordinals, we’re witnessing the emergence of new initiatives like Runes, which allow for the creation of fungible tokens on the Bitcoin network.

Looking ahead, the logical next step after NFTs and tokens is web3 gaming. Over the next few months, we can expect to see new games launching in the Bitcoin ecosystem. These games may integrate Ordinals, Runes, or other Bitcoin Layer 2 solutions, marking an exciting evolution in the intersection of Bitcoin and gaming.”
Morteza Shahini, COO and Co-founder – Intraverse 

“Since the SEC approved the first-ever Bitcoin ETF earlier this year, the Bitcoin halving is the one of the most highly anticipated events in the crypto-world. 

From a web3 gaming perspective, while there are several play-to-earn Bitcoin games, most games that integrate blockchain functionality do so with a programmable chain, such as Polygon or Solana. From that perspective, the halving won’t have a direct impact.

However, Bitcoin is the world’s most popular and well-known cryptocurrency and any changes in the protocol spill over to the entire crypto industry. Previous Bitcoin halvings have correlated with bull runs, so any game that features some form of token will be in a position to benefit if it organizes its community and tokenomics correctly (particularly with regards to the timing of lockups and vesting periods).

While many in the industry say that we’re approaching a bull run (or that we’re already in it!) I don’t think we’re quite there yet. Investors are still mostly keeping their cards close to their chests to see what will happen. There are many big infrastructure changes happening this year – the Bitcoin halving, the proliferation of L2s on Ethereum due to the Dencum upgrade, the arrival of Agile Coretime on Polkadot – and the web3 gaming space might not see the full impact of those changes until next year.”
Alun Evans, CEO and Co-founder – LAOS Network

“Historically speaking, Bitcoin halving has always been an impactful event in terms of sentiment. With Bitcoin seen as the ultimate store of value in the world of Web3, reducing its influx raises its prestige in the eyes of traders and miners in a sense. It’s like the Oscars for Web3 in terms of the eyeballs on it and how the industry moves on after that event.

Now, with GameFi being touted as one of the market drivers during this cycle, by proxy, this can prompt more people to invest in Web3 gaming tokens, provided there’s enough messaging along the lines of ‘Bitcoin picking up, and Web3 gaming is going to explode. If you can’t afford Bitcoin or want to diversify, here’s what’s going to make you 100x’. 

Ultimately, it’s only impactful by proxy overall, but of course, has a much more direct influence on Ordinals and the games powered by them. Overall, we can confirm from previous experiences it’s more so how Web3 games themselves take an opportunity from halving to create a spotlight on them that can have an output rather than the halving itself.”
Adrian Krion, CEO and co-founder – Spielworks

With major traditional game studios and publishers, such as Ubisoft, Square Enix, Konami, and others entering the space, plus a year in the bear market where many developers focused their attention on building great games, products, and services –  this time, web3 games have the potential to make an impact on the gaming industry through the rising interest in bitcoin, crypto and blockchain. 

From a token perspective, it should, predictably, impact altcoins and, therefore, gaming tokens. The question waiting to be answered through market action is: Will it have an impact on mass adoption or just a wider push of speculative traders and crypto-traders? The web3 gaming industry spans a broad spectrum from crypto degens to more hardcore gamers, with game design falling everywhere in between, from token-driven economies to games that aim to create the most seamless experience for non-Web3 natives.

While the interest in crypto, particularly bitcoin, is spreading to a more mainstream audience, it will be interesting to see whether this extends to adopting blockchain-based games, what happens post-halving, and the longer-term impact on web3 gaming. 

What are your thoughts? We’d love to hear your views in the comments below!
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This article is a thought piece that assesses the current Bitcoin halving event in correlation to blockchain-based gaming. This piece and the opinions within are not intended as financial advice. Please do your own research and take care when trading. In the meantime, stay cool and carry on gaming! : )

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