I see many people talk about the bitcoin price will surge when the bitcoin halving happens in 2024. Their stories usually emphasize the past experiences. (only 3, not very convincing evidence). But I want to understand why the price is expected to go up.
After the halving event, miners will be rewarded with less bitcoins. The quantity of Bitcoin continues to increase at a slower rate (6.25 -> 3.125 BTC) every 10 min. If the demand of Bitcoin stays constant, the price of Bitcoin decreases at slower rate, rather than increases.
In the graph below, the supply of bitcoin is vertical (inelastic) because we have no control over the quantity of bitcoin (it is programmed). After halving the width between the supply curves become narrower. Therefore price goes down less.
I can only think the demand increased past halving events (because of news), and that created bubbles. Am I wrong?
Thanks.
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