Bitcoin (BTC) is surging after Donald Trump's speech at a major cryptocurrency summit.

Trump spoke at the Digital Asset Summit (DAS) in New York on Thursday and bitcoin, by far the largest cryptocurrency, recovered much of its losses from recent months.

Donald Trump's speech at a major cryptocurrency summit in New York saw bitcoin recover much of its losses from recent months.

The president is set to speak at the Digital Asset Summit (DAS) in New York on Thursday (19 December).

Bitcoin, by far the largest cryptocurrency, went over $100,000 (£77,200) for the first time in December but has since crashed down to $79,000 (£61,000) amid wider fears of economic turmoil caused by the Trump administration.

However, ahead of Trump's speech, the currency climbed back up to $86,000 (£66,400).

Speaking via video link from the White House Trump promised to make the US a bitcoin "superpower" and the "undisputed crypto capital of the world."

He highlighted his administration's actions on loosening regulations on the crypto industry, including ending what he called "operation chokepoint 2.0", which saw federal agencies encouraging banks to not operate in risky sectors, particularly the crypto industry.

Trump said the operation went too far and acted as a form of "lawfare" against the industry.

The president has also instituted the US government's Crypto Federal Reserve which will hold certain cryptocurrencies when they are acquired by state operations rather than sell them.

Despite the losses of recent months bitcoin has been on an incredible run in recent years after hitting a low of $16,000 (£12,300) in 2022. A lot of the recent gains have been associated with an event known as the Bitcoin halving that happened on 20 April 2024.

Halving is an event automatically triggered by the bitcoin network, which is designed to prevent inflation in the cryptocurrency but it can also trigger large price rises.

The halving happens roughly every four years and after each halving the following one to two years often see bitcoin's price explode.

Aaron Peak, personal finance expert at credit reference company CredAbility, said: "Bitcoin is notoriously volatile: prices can surge or crash unpredictably, so investors should always be cautious.

"Bitcoin’s price has been on a rollercoaster recently, and we've seen some major price swings in recent months.”

What is Bitcoin halving?

Bitcoin halving reduces the rewards of mining the cryptocurrency by 50%.

Crypto miners use high-end computing rigs to perform calculations and are rewarded with bitcoin but after each halving, the reward decreases.

Miners complete calculations required to verify transactions, using computers to make guesses to solve the puzzle and the first to solve it adds a new block to the blockchain – a digital ledger that records and verifies transactions across a network of computers.

The dates of the halvings are not set, rather they occur every 210,000 blocks that are mined.

Aaron Peak, personal finance expert at credit reference company CredAbility said: “Right now, miners – who verify bitcoin transactions – earn 6.25 bitcoins for each new block they add to the blockchain."

“After the next halving, their reward will drop to 3.125 bitcoins. This reduces the supply of new coins, which can affect bitcoin’s price.”

Why does it matter?

Bitcoin halving performs several important functions, restricting supply and limiting inflation, which helps to maintain the cryptocurrency’s value.

Peak explains: "Halving is important because it slows down how quickly new bitcoins are created. Historically, bitcoin halving has led to price increases. When fewer new bitcoins enter the market, but demand stays the same (or grows), the price often rises.

“It’s a bit like gold, if mining gold became twice as hard overnight, but people still wanted it, the price would likely go up. However, past performance doesn’t guarantee the same outcome every time, so there are no certainties."

When is the next Bitcoin halving?

The next bitcoin halving event is expected to happen in 2028, but it all depends on how quickly miners create new blocks, Peak explained.

Peak said: "It will happen after another 210,000 blocks have been added to the blockchain, which usually takes around four years.

"This happens because bitcoin has a fixed supply – only 21 million bitcoins will ever exist. The process is built into bitcoin’s code to control inflation, a bit like how central banks manage the money supply, except no one can change bitcoin’s rules."

Bitcoin halvings are expected to continue until 2040.