The price of the Bitcoin is a rewarding topic for every crypto investor every day. Sometimes it looks just like the weather forecast or football, everyone understands it and nobody knows how to predict it.Where we saw yesterday that the statistics are disastrous for a rise in the price of the Bitcoin, today we see analysts again expecting to tap the $ 55,000 at the end of next year. More and more analysts say the Bitcoin halving will play a role in this. We explain what Bitcoin halving is, why this should lead to price increases and why we doubt that.
Bitcoin halving? What is that?
Rest assured, there is no Central Bitcoin Bank on the way to halve your assets. Bitcoin halving is about the reward that miners receive when they approve a block of Bitcoin transactions on the Blockchain. When a miner is the first to calculate the mathematical formula to validate a block on the Blockchain, 12.5 Bitcoin will receive a reward. This reward is halved every four years. This technique, halving, was deliberately introduced by Sathoshi Nakamoto to promote the scarcity of the crypto coin. The idea here is that more scarcity leads to higher prices.
What are the price effects of Bitcoin halving?
The Bitcoin has been in existence since 2008. Since the halving takes place every four years, there have been two earlier halvings, in 2012 and 2016. Both times the price of the Bitcoin rose. We summarize the results:
As you can see in this graph, you see a similar pattern after the halves of 2012 and 2016 (the two green vertical lines). After a substantial fall in the price, the price flattened until about a year before the halving. Then the course reacts after a habituation period after the halving with a new highest point, after which fall and flattening follow. As you can see, the Bitcoin seems to be using a similar pattern again.
What about analysts? Expectations?
The next mining halving takes place at block 630,000. At this time, the average processing time for a Block is just under 10 minutes. Various countdown clocks can be seen on the internet. According to the calculations, the halving block will be mined on May 20, 2020. If we continue with the graph above (as many analysts do), the rate will rise about a year before the halving and then, 1.5 years after the halving, record a new highest rate. According to calculations of the growth curve of previous increases, this new exchange rate ceiling could be $ 55,000.
Is it certain that the next Bitcoin halving will cause the price to rise?
Although the analysts can be very convincing, we see room for critical comments. First of all, according to many a ‘history’ of 2 blocks of data is not enough to talk about a pattern. In addition, the market conditions during the previous two halves were very different from the current situation. If only because there are now many more crypto coins than in 2012 and 2016. The halving of the return also has consequences for the miners. After all, they will need a higher rate per currency.
A complication here is that the market does not seem to care much about the cost of mining. According to May 2018 calculations, the costs for mining 1 Bitcoin are around $ 8,000. This level has not reached the Bitcoin price since July 2018. For the time being, the figures also do not indicate strong price increases and the experts predicting moderate growth are on course much better .