What will halving bring us? The Cryptoverse anticipates the 2020 Bitcoin halving. BTCMEX collected predictions and opinions about the upcoming event.
The crypto community is thrilled about the upcoming Bitcoin halving. The third halving event is predicted to happen in May 2020. What would that mean for miners, traders, hodlers? And why the Cryptoverse is warming up the topic? Let’s figure it out!
To start with, halving is an event when the reward generated for mining a Bitcoin block is divided in half. Bitcoin halving is scheduled at the height of the block, and not the specific date, and occurs every 210,000 blocks (approximately every 4 years). BTCMEX explained halving and had a recap of two previous Bitcoin halvings in yesterday’s Back to Crypto Throwback.
In 2009 the initial mining reward was 50 BTC for a block. The first halving happened on 28 November 2012, the reward was reduced to 25 BTC. The current award, which was set on 09 July 2016, is 12.5 BTC. The next halving will happen sometime in May 2020, and the reward for mining a block will be 6.25 BTC.
Well, the biggest question is whether the BTC/USD price will repeat the pattern of “to the moon” rallies, witnessed after previous halvings, or… not?
How exactly does halving affect the Bitcoin price? Reducing the reward by half affects the number of miners who receive Bitcoin rewards, and has historically had a positive impact on the price of BTC in the long run. Mining is an energy-demanding and costly process while the block reward is the main incentive for mining. The market didn’t see the significant BTC price drops after halvings as they might make miners unprofitable.
The first halving led to a famous 2013 price rally - from USD 13 to USD 260 per Bitcoin in four months. On the day of 2016 halving the BTC/USD price was at 647 before it went to an all-time high USD 19,891 in December 2017.
Financial analysts and crypto observers are currently flooding the web with BTC price predictions, and the majority is expecting more volatility.
Just like in 2016 the BTC price has been on the decline recently, and Bitcoin has been traded sideways on the crypto exchanges. If we look at the insiders’ numbers, miners in the US will become unprofitable if the price hits approximately USD 6K, while Chinese and Russian miners break at around USD 3K. And the East community is securing its dominance over Bitcoin. Preparing for the reset?
The mining industry is robust in China. A significant portion of mining machines and all the mining chips are coming from China. With President Xi proclaiming his support for the blockchain, the Chinese government removed Bitcoin mining off the unwanted industries list, according to the official documentation.
All of this does have major implications for the 2020 Bitcoin halving. The good news is, no matter where the price goes, you can go Long or Short on BTCMEX.
Please note, that the article is a part of BTCMEX Blog, the views and opinions expressed here are the contributing author’s only, and do not necessarily represent the views of the company.
Julia Bulakh for BTCMEX