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With less than 10,000 blocks left, Bitcoin will be halving, will the price skyrocket?

    With just over two months left and Bitcoin still struggling under $ 9,000, will the halving really affect the price of the coin?

    Summary of halving Bitcoin

    From now until the halving of Bitcoin, there are less than 10,000 blocks, as tweeted by Bitcoin core developer and educator Jimmy Song. The vast majority of people in space predict that it will have a major impact on the price of Bitcoin. Here are some reasons.

    “There are only nearly 10,000 more.”

    Just as the source with Bitcoin is limited to 21 million, the mining reward for creating new blocks is reduced every four years or every 210,000 blocks. The reward is halved, so this term is called halving (or halvening). This will continue until all 21 million Bitcoins are mined and put into circulation.

    With limited supply, Nakamoto ensures that Bitcoin, unlike fiat currencies, will never lose purchasing power over time. In fact, the limited supply significantly increases the rate of BTC's continuous price increase in the future.

    This price increase is what makes Bitcoin mining profitable for miners even as the rewards diminish over time.

    Mining rewards are made up of block subsidies and transaction fees. Subsidies include newly created Bitcoin and now constitute a major part of the reward. The rest is made up of transaction fees paid by all transactions in the block.

    The current reward level is 12.5 Bitcoin plus TX fees when finding a new block. After the upcoming halving, the Bitcoin mining reward will be cut in half to 6.25 BTC. This will continue until all Bitcoin is released, at which point the network must be sustainable with only transaction fees.

    The last two halving episodes

    When the first Bitcoin halving occurred on November 28, 2012, the mining reward dropped to 25 BTC. At the time, the Bitcoin price was about $ 11. In the following 2013, Bitcoin witnessed a price increase of up to $ 1,135 on November 29, with a spike of 10,218%.

    The second Bitcoin halving occurred on July 16, 2016, when the reward was reduced to 12.5 Bitcoin per block. This time, the price did not respond immediately.

    In fact, after the last halving, BTC was locked in a rather dull trading range of $ 500 to $ 800. This lasted until the end of 2016. Then, on December 21, 2016, the price penetrated the $ 800 level and a rally after the last halving took place.

    Over the next 12 months, a booming bull market happened to Bitcoin and the price reached an all-time high of $ 19,862 on December 18, 2017, setting an increase of 2,827%. Therefore, based on these past results, an increase will certainly not surprise the community.

    Will this halving trigger trigger Bitcoin price hikes?

    Many well-known analysts in the space hope the halving will have a strong impact on Bitcoin price, including Thomas Lee, managing partner of Fundstrat, who believes that the price of Bitcoin will triple by 2020.

    Other influencers, including Morgan Creek Digital's Anthony Pompliano, also regularly tweeted about their excitement ahead of the upcoming halving event.

    "There are 195 days until the next Bitcoin halving, there are less than 3 million Bitcoin left to mine. Hash rate continues to reach an all-time high. We are waiting for the strongest computer network in the world to continue to grow stronger. Incredible”.

    This view is also agreed by traders and HODLer, who believe that the price of Bitcoin will explode soon.

    "2020 will repeat 2016, the boom is yet to come. You still have two months to get the best price, after which the real battle begins. "

    However, there is no 100% certainty that history will repeat. As a Reddit user comment that:

    "This is a game of supply and demand. The halving session will reduce supplies … so if demand stays the same, prices will have to rise. “

    The fall in February was a decisive blow for Bitcoin speculators. If demand falls and prices fall, mining rewards can make it difficult for miners and even force them to leave the space.

    "When February ended, Bitcoin plummeted below $ 9,000, after setting the $ 10,000 mark earlier this year. With the price rapidly dropping and the halving coming up in May 2020, all eyes will be on the cryptocurrency market. "

    While bitcoin maximizers like Max Keizer are soon calling for a $ 400,000 Bitcoin, it's highly unlikely that Bitcoin will go up as strongly as twice the previous halving.

    In fact, there has been a large reduction in the percentage increase in prices since the halving in 2016 compared to 2012, less than 72%.

    So let's make a little conjecture. If we assume that the increase will decrease by 72% compared to the price of the halving in 2016, then we can expect BTC to witness a significant increase of up to 797% during this period.

    If the price of BTC is $ 9,000 during the next halving, we can expect to see its price reach $ 71,730 in about 12 to 18 months from May 2020. This means the price of BTC There probably won't be any dramatic action for at least one year after halving.

    Of course, these are only predictions and cannot be sure of the future direction of any speculative assets. But, given the current information, it seems that 2021 will be a favorable year for BTC price.

    You can refer to the Bitcoin price here.

    Huyen Dinh

    According to Bitcoinist

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