In May 2020, the block reward for Bitcoin will be halved for the third time. Based on previous performance, the market cap may be calculated in trillions of dollars.
Currently, Bitcoin’s market cap stands at $ 142 billion or $ 0.1 trillion. The highest value reached was 0.3 trillion dollars in December 2017. By comparison, gold on the market has a value of 8 trillion dollars.
This could change after May 2020. Analyzing the evolution of Bitcoin following the two previous halving events, a billion-dollar market cap is not only possible, but likely. In the past, the significant reduction in the supply of new Bitcoin currencies has led to a massive increase in demand.
Bitcoin effect halving in price history
Reddit user slvbtc has shown that, in the years following the block reward half-life, the price and market cap of Bitcoin has increased dramatically.
“Before mid-November 2012, the price was $ 12 and the block reward was 50 Bitcoin per block ($ 600), which means the market absorbed $ 604,800 in Bitcoin per week. That halving event reduced the offer by $ 302,400 a week, increasing the market cap by $ 14 billion the following year.
Before mid-July 2016, the price was $ 650 and 25 bitcoin were mined per block ($ 16,250), meaning the market absorbed $ 16,380,000 a week. That halving event reduced the new offer by $ 8,190,000 a week, “
explained slvbtc.
Over the next 18 months, Bitcoin’s market cap rose to $ 300 billion.
Forecasts for the future
Based on these calculations, slvbtc predicts that if Bitcoin is priced at around $ 10,000 before the offer is reduced, the market cap of cryptocurrency should amount to billions of dollars.
”With Bitcoin valued at $ 10,000 before halving, 12.5 BTC per block ($ 125,000) will be mined. That means $ 126,000,000 goes into the ecosystem a week. This 50 percent reduction from May 2020 will result in decreases of $ 63,000,000 per week, which could cause market cap growth with trillions of dollars over the next 2 to 3 years, ”
he added.
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