In May 2020, the reward for miners will be halved for the third time. So just over half a year to go. In the previous halves, you saw that the bitcoin rate in the six months prior to the halving, was increased by a factor of 1.7 and 2.3.
Bitcoin is becoming increasingly scarce
Many analysts in the bitcoin world expect that the bitcoin block halving is a catalyst for a rising bitcoin rate. Because every four years the number of new bitcoins is halved, the increasing demand can ensure that bitcoin can quickly become worth much more.
Bitcoin is designed in such a way that the coin becomes increasingly scarce over time. When bitcoin was launched in 2009, each miner received 50 bitcoin as belonging, provided that they were allowed to add the correct block to the blockchain. Every four years or so (it’s not really about time, but about 210,000 blocks) the reward is automatically halved.
Price also rises for halving
So far there have been two halves, from 50 to 25 and then to 12.5 bitcoin. In all likelihood, the next halving is on or around May 17, 2020 and then the reward halves to 6.25 bitcoin.
According to the Dutch crypto analyst and twitter celebrity (ok, in cryptocircuits) Plan₿ (@ 100trillionUSD), the bitcoin price does not only rise after halving. Many investors want to respond to this price increase and buy bitcoin before the planned half-date. At least, the investors who are aware of the halving.
We are at about 6 months before May 2020 #bitcoin halving.
In 2012, btc jumped from $ 5 to $ 12 (2.3x) in those 6 months before the halving. In 2016, btc jumped from $ 350 to $ 650 (1.7x). pic.twitter.com/DKSQBOO2TD
– Plan₿ (@ 100trillionUSD) October 16, 2019
Plan₿ explains that in the tweet above, in which he emphasizes that the third block halving is a little longer than six months away from us. In the six months prior to the first halving event in 2012, the price of bitcoin rose from around 5 dollars to 12 dollars (2.3x). The same applies to the second halving in 2016, when the price rose from around $ 350 to $ 650. This means an increase of 1.7x.
But what happens after the halving?
That is a good analysis of what happened before the previous halves. It is especially interesting for many analysts to see what happens to the rate after halving.
Valdrin Tahiri of BeInCrypto’s previously wrote that $ 400,000 per bitcoin is possible. Analyst Rekt Capital seems to agree. He focuses his prediction on the potential upper limits of his course after halving:
If #Bitcoin rallies just like it did in its previous two Halvings…
Bitcoin’s price will be $ 385,000 – $ 425,000
– Rekt Capital (@rekcapital) September 10, 2019
In his article on Medium, he writes that halving marks the beginning of a new bitcoin bull market. According to Rekt, the halving is a guarantee for scarcity, not only towards the halving, but also in the many months thereafter.
Another nice observation comes from Rhytm. The halves ensure that the goal posts are moved.
Before the first halvening,
the goal was 1,000 bitcoin.
Before the second halvening,
the goal was 10 bitcoin.
Before the third halving,
the goal is 1 bitcoin.
Before the fourth halving, the goal will be 0.1 bitcoin.
– Rhythm (@Rhythmtrader) October 16, 2019
Have you already achieved your pre-halving bitcoin goal? Remember, the halving is already in half a year and is getting closer.