Halving Bitcoin located just 117 days from its date, an event that affects the number of tokens that can be generated every 10 minutes. Based on historical data, this event tends to serve as a catalyst that raises flagship cryptocurrencies to new historical highs.
Halving event
Bitcoin goes through a fixed process called “halving” when 210 BTC blocks are mined. This is considered the main economic model in the protocol, which ensures that coins are issued at a sustainable pace. This happens about every four years. Halving halves the rewards received by miners for Mining block, and therefore reduces the release rate.
Around May 12, 2020, exactly in block 630, miners who are currently awarded 000 new BTC for each block they decide will be rewarded with only 12,5 BTC per block. The inflation rate of this cryptocurrency will also be affected for a long period of time, as supply will be reduced in the future.
A series of measures to reduce remuneration for the block is planned until 21 million BTC is mined. These events can last until 2140, when the block reward falls below 1 satoshi, if we assume that the miners will be in the next 120 years.
Previous Block Remuneration Events
To date, since the launch of Bitcoin on January 3, 2009, only two such events have occurred. These events have proven that they are an important catalyst that raises the price of this crypto before and after they occur. BTC's disinflationary monetary policy has significantly increased its value, as it is becoming increasingly scarce.
Halving 2012
On November 28, 2012, Bitcoin passed its first half, at a block height of 210. During this time, block rewards provided to miners fell from 000 BTC per block to 50 BTC. Such a significant reduction in supply had a great impact on the price of the pioneer cryptocurrency, which was received on the eve of the event and after it.
After reaching a bottom of $ 2 on November 19, 2011, Bitcoin entered the year of the bull rally. This cryptocurrency saw that its price rose by almost 500% in anticipation of the first reduction. By the time the event ended on November 28, 2012, BTC was trading at around $ 12. From that moment, Bitcoin soared above 97x, reaching a record high of $ 1,177 on November 30, 2013.
2016 year
The second event to reduce block rewards took place on July 9, 2016 at a block height of 420. At that time, the reward for mining 000 BTC dropped to 25 BTC per block. Like the first reduction, it also had serious consequences for the price of Bitcoin.
On January 14, 2015, Bitcoin hit the bottom of the market at $ 164 after the 2014 bear market. Since then, the BTC has jumped nearly 300 percent to a maximum of $ 650, when a halving was due. After the pioneer cryptocurrency survived its second halving on July 9, 2016, it achieved parabolic growth, as a result of which its price increased 29 times. On December 17, 2017, Bitcoin hit a record high of $ 19.
History repeats itself
Previous halving events that they are an important pillar in the bitcoin trend. They seek to push the price of flagship cryptocurrencies to new historical highs. Consequently, the upcoming event of a reduction in block rewards may have similar consequences.
So far, it seems that Bitcoin has reached the bottom of the market on December 15, 2018 at a price of $ 3150. Since then, this cryptocurrency has grown by more than 180 percent and is currently trading at around $ 8700. Investors are now expecting higher prices as the date approaches.
Wisdom of the crowd
Alex Kruger recently conducted a survey on Twitter, which was attended by more than 4000 participants. Kruger asked his followers what they thought would be the highest year for Bitcoin.
The results show that 47 percent of respondents believe that BTC will ever trade above $ 20 sometime this year. About 000 percent are convinced that this crypto product will reach a maximum of $ 28 to $ 14. Meanwhile, the remaining 000 percent said they would trade at $ 19 or less.
The survey showed that almost 75 percent of participants believe that bitcoin will double this year.
What will be the high of the year for $ BTC?
- Alex Kruger (@krugermacro) January 14, 2020
Crypto communities claim that Bitcoin entered the new market last week. A breakthrough of the resistance level of $ 8500 was seen as a breakdown or breakout point that could set the stage for a bull run. According to Mohit Sorout, a partner at Bitazu Capital, a new uptrend has emerged.
However, there are other analysts who cannot agree with the forecast. For example, Chris Slaughter, the founder and CEO of LVL, has been studying fractals since December 27, 2019, which turned out to be true. This model anticipated the recent rally, as a result of which Bitcoin exceeded $ 8500. Now, Slaughter is evaluating a downturn in the market that could push BTC to “new lows.”
The wisdom of the crowd is rarely true, especially in the cryptocurrency market. According to this need, 75 percent of the market is likely.
According to the index Crypto Fear and Greed, different views on the future reflect the general mood of the market at the "neutral" stage. It is still unknown that history and the upcoming reduction in time require BTC to achieve new record highs.