Bitcoin halving is scheduled to take place this year in May. Halving can be defined as the short name for one of the most awaited events in the history of Bitcoin. During the May month, the number of BTC taking part in circulation every 10 minutes, also known as block rewards, will fall by half to 6.25 from the current 12.5. Bitcoin halving takes place every four years and has occurred twice earlier. The supply will come down, and the demand will remain the same that will move the prices of cryptocurrency up.
Will Bitcoin halving boost BTC price?
The Bitcoin price has fallen just before and after the two earlier block reward halving events that took place in 2012 and 2016. And, now Bitcoin has displayed the same tendency approaching the May 2020 halving. A theory has surfaced that miners strive to sell prior to the halving to amass adequate Bitcoin to finance their operations for several months after the halving takes place. It lets them hold onto the majority of Bitcoin they mine. Such a practice would be helpful for miners as the break-even price of BTC mining goes up tremendously when block reward halving takes place. According to experts, the break-even price of BTC mining is likely to rise from $7000 to approximately $15,000 after the halving event, As per coinlib.io.
When Bitcoin halving took place in 2016
The second halving occurred in the year 2016 in July. Bitcoin managed to maintain a price of approximately $600-$700 prior to surging to $20,000 in the stunning bull run of 2017.
Bitcoin had registered a growth of more than 33 times from its price before the second halving and more than 1818 times from its price before the first halving. According to data available, the price of Bitcoin fell from $683 to $572 in the period of just 77 days soon after the halving took place. Then the price of BTC began to slowly recuperate in the next three months period soon after the halving. It entered into a vertical rally starting in March 2017.
Will Bitcoin halving affect the price of Bitcoin?
As of now, Bitcoin has not displayed any opposite connection with stocks and gold. Currently, the COVID-19 outbreak across the globe has turned investors jittery. They have desperately begun to sell various types of assets irrespective of their risky or risk-free nature. Last February 2020, BTC, stock, and gold have begun to move in a similar manner and all have started reacting in a similar manner to macro events. Coronavirus may not cause any impact on the price but may impact the supply chain of miners and mining manufacturers. The third halving may witness the reward declining to 6.25 BTC.
We may conclude here that BTC did not have a robust infrastructure in 2012 and 2016 to facilitate trades as it has in 2020. This year Bitcoin is likely to face a block reward halving with an effective market infrastructure in existence. Bitcoin code review will offer you all vital details about cryptocurrency.
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