Unexpected coronavirus pandemic in March, caused bitcoin value to lower its price in half, with bad consequences for investors. In April, the Bitcoin value increased above 7000 US Dollars per unit and slowly decreased over the weekend for almost 6800 US Dollars per bitcoin. As we all know, in exactly 25 days, it’s expected another halving - a third scheduled one, which every bitcoiner awaits with solid plans about it.
What is ‘Bitcoin Halving’?
The Bitcoin Halving refers to the event happening one day in four years when the number of bitcoins that enter in circulations every 10 minutes, drop by half. Despite the many scenarios about the cryptocurrency price and the crypto market, this process progressively increases its value in time.
Imagine that in 2009, the system mined 50 coins every 10 minutes, while today, 12.5 bitcoin as a block reward. Satoshi created an algorithm for adding and distributing new bitcoins in the circulations with a much predictable inflation schedule.
The Bitcoin Halving and the BTC price - expectations
Since 2009, for Bitcoin, after two halving events, each time the result was a price increase before and after the halving (as seen in the image below). The first event in November 2012, caused a price increase shortly after the halving, while in July 2016, the BTC value dropped only by 10%. Anticipation and a previous demonstration immediately gained back its value, though this time, the progress was steadier over the year following the halving.
Even if the supply of bitcoin decline won’t affect the increase of the price, this year gives more time to the miners, and the traders to prepare. Weak miners are exposed to this wave because it takes a serious investment in the equipment, while the professionals already know to profit from it.
The 2020 Halving Event, in May, the block reward is estimated to halve into 6.25 BTC per block, from the current amount of 12.50 BTC per block. So, most people will buy bitcoin in anticipation, creating a value increase before the event, but the increase this year will be as slowly s in 2016.
Conclusion
In conclusion, with Bitcoin Halving, Satoshi Nakamoto ensured a sustainable and secure cryptocurrency network, even after all the bitcoins mined out. The Halving process maintains both the deflationary and the decentralized system comparing to the fiat currency.
Let’s see two positive outcomes of Bitcoin Halving:
- Mining stability tends to have a higher speed and a secured network to protect the cryptocurrency system. Following a Bitcoin Halving, the network security develops at least 6 months.
- Bitcoin Price – the accumulation in anticipation of the halving, increases the BTC value, and a year later, the price difference increases significantly.
Did you know
- Bitcoin Halving Event is celebrated by bitcoin owners, in major cities, all around the world?
- An amount of 21 million bitcoins are estimated to be mined till 2140?
- The halving is a necessary process that controls the Bitcoin supply?
So, what do you think about Bitcoin Halving 2020?
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