Update: The third halving in BTC history took place on May 11th, 2020. AntPool mined block #630000 at 19:23 GMT with an already reduced reward. The amount decreased from 12,5 BTC to 6,25, and it will remain until the next halving in 2024.
All crypto community is waiting for May when the third Bitcoin halving will happen. A week before the event, the popularity of the halving search request exceeded the maximum of 2016 by 3.5 times, according to Google Trends data.
Many people believe that halving will cause a Bitcoin bull run. Meanwhile, miners whose income will fall twice are bothered by the upcoming event. Changelly is monitoring developments. In this article, we have collected the main Bitcoin halving issues that can interest you.
How Does BTC Halving Work
Halving is a process of reducing the speed of generating new cryptocurrency units. This is a periodic event that causes the reward cut for successfully mined blocks.
Halving is an essential part of the economic model of cryptocurrencies, as it is responsible for the stable rate of new coin creation and its further regulation. This controlled level of monetary inflation is one of the main differences between cryptocurrencies and traditional fiat currencies, which mainly have an infinite circulating supply.
The first and the second halvings occurred on November 28, 2012, and July 9, 2016. During the first halving, the BTC price was $12.31, and during the second $650.63.
In theory, after 32d halving, the creation of new Bitcoins will be impossible. Thus the maximum supply of coins will be achieved.
When Will Bitcoin Halving Happen
|Event||Date||Block Number||Block Reward||Total new Bitcoins between events|
|BTC launch||3 January 2009||0||50 BTC||10,500,000 BTC|
|First halving||28 November 2012||210,000||25 BTC||5,250,000 BTC|
|Second halving||9 July 2016||420,000||12,5 BTC||2,625,000 BTC|
|Third halving||Expected 11 May 2020||630,000||6,25 BTC||1,312,500 BTC|
|Fourth halving||Expected in 2024||740,000||3,125 BTC||656,250 BTC|
|Fifth halving||Expected in 2028||850,000||1,5625 BTC||328,125 BTC|
Price Changes Before Halving
Being the first crypto, Bitcoin is always among the first on Changelly. Moreover, Bitcoin/Ether is the most common exchange pair that you can easily swap as well as other 150 cryptocurrencies listed on Changelly.
For this year Bitcoin peak was at the price of $13,102 USD with a market capitalization of $233,357,162,369 USD. It was the most robust hike since January 2018. The common growth of other currencies accompanied the jump.
March 13, the price fell to its lowest this year, $4,121 USD, with a market capitalization of $75,287,391,918 USD. There are several reasons, namely the short-selling out of Asia, or the rapid spread of the coronavirus.
In halving anticipation, the price is increasing, and experts say Bitcoin has never been this oversold.
The Bitcoin Relative Strength Index (RSI) measures the latest changes in the price of Bitcoin and makes it clear if Bitcoin is oversold or overbought. If a cryptocurrency is overbought, it has a high index, which means that it has a strong performance. If BTC is oversold, the RSI is low, and the performance is weak.
Well-known twitter crypto blogger Plan B noticed the weak RSI level of Bitcoin before halving.
Bitcoin Halving Countdown
Approximate Bitcoin halving day is May 11, 2020.
Bitcoin Halving Price Prediction
After the second Halving, Bitcoin reached its all-time high point ($20,089.00 USD) in 2017. So, the Bitcoin community is waiting for the third one to see if the record will be broken.
It is tricky to make any price prediction, considering the pandemic with the inevitable economic crisis. As stated by the Efficient Market Hypothesis (EMH), the market is fast and responsive enough to converge at an equilibrium price that correctly mirrors all the exogenous information. Endogenous processes cannot affect the price, and they are already built into it. The price is only affected by external factors such as political events, economic events, etc. Consequently, such sharp price changes occur due to exogenous news that has not been considered in prices yet.
For those who support the EM hypothesis, BTC supply is endogenous information and should already be included in the price.
Some analysts consider that the upcoming halving will differ from the previous two. CoinShare company estimated possible scenarios after will halving happen:
- Disaster. This scenario assumes that the price will gradually decline, forcing the miners to turn off the equipment. This will lead to Bitcoin network stagnation: hashrate decrease, slow block generation, etc. which eventually will cause a stop.
- Negative. According to this scenario, Bitcoin price might be at the mercy of speculators or under additional pressure from miners.
- Positive. Following the Stock-to-flow model.
- With minimal impact. Nothing unusual will happen, at least at first. The scenario is called probable, and the volatility will be within 1-5%.
CoinShares considers that the combination of the recent fall in the BTC price and the upcoming halving has encouraged miners to reinvest and upgrade their equipment. In the future, this will reduce the impact on the value through the sale of coins.
However, there are other opinions.
Wallet Investor predicts Bitcoin a bull run. According to the source in June, Bitcoin might reach the point of $9632.110 USD and $10678.80 USD by the end of the year.
According to Coin Predictor, after the halving, the BTC price is likely to descend to $7,504.17 USD by June 1.
Long Forecast bullish prediction shows a positive trend after Bitcoin halving. It assumes that by the end of May, BTC will reach the scale of $11,534 USD and will finish the year in a range of $10316-13206 USD.
Plan B supposes that the development of the Bitcoin value will follow the scenario of the last halving. Bitcoin Based on his opinion, Bitcoin must gain x10.
Danny Scott, CEO of CoinCorner crypto exchange, claims that we should expect a hugely successful year for BTC.
Binance CEO Changpeng Zhao considers that history will not necessarily repeat itself. However, the price is determined by supply and demand, not the cost of producing coins. But miners may not want to sell them below the prime value, further reducing the supply.
Besides, according to Zhao, halving will result in a decrease in Bitcoin inflation, which also encourages price growth.
Anthony “Pomp” Liano’s forecast is anywhere between $20,000 USD and 100,000, which is a pretty wide range. The blogger believes that BTC will hit $100,000 by the end of December 2021.
Ivan on Tech, Youtube blogger, believes that nothing unusual will happen on the halving day except the supply reduction by 50%. According to the experience of the previous halving, most likely the day after, nothing will happen either.
Altcoin Daily reminds again that all Bitcoin price moves happened before or after the previous halving. He claims that there is no need to wait for price changes within 30 days after the event, as they can happen only after 3-6 months. Altcoin Daily predicted Bitcoin to be trending up with decreasing supply and increasing demand. The possible price for the moment of halving is $8,000 USD.
Andreas Antonopoulos (aantonop), another Youtube blogger, compared any explanation and price forecast with the astrological prediction like “the price will do this because mercury is an ascendant in the constellation of Virgo.” He regards that nobody knows what is going to happen next, and people are frightened by the upcoming halving.
He assumes that there is a possibility that after halving the price will go down. Hashpower probably will decline for a short period of time, and that will result in a slowdown of the network. It will recover in 3-4 weeks after halving. However, there is probably nothing to expect from the first couple of months.
How to Prepare for BTC Mining
Bitcoin halving is a big deal for miners. When a reward is reduced by 50%, it is going to be more challenging to produce new BTC. Hence, this will make coins deficit and prevent extreme inflation. In effect, a vast number of miners will stop their work and close their operations since it will no longer be profitable for them.
This halving is primarily affecting those who live in areas with high electricity costs. However, if BTC price increases, mining can still be profitable.
The capitulation of miners increases the selling pressure, while the inefficient market players do not leave the network. In the long term, this should support the price. Filtering ineffective players will allow the most profitable market participants to remain.
All miners should reflect if their work is profitable, comparing all mining expenses with the amount of the reward. It does not mean they have to quit the game. In this case, a miner should think about switching on the asset with the highest mining profitability.
The third halving encourages users to buy more coins. Wealthy crypto investors, so-called “whales,” accumulate BTC, hoping for an increase in the coin value after halving.
Unfortunately, no one can predict the direction of the price of a digital asset after this event with a hundred percent probability. Although investors still expect growth. It is quite possible that after the end of quarantine measures in many countries of the world, the price of BTC will jump up again.
Investors should be careful before Bitcoin halving. There may be no direct connection between the procedure itself and the growth of the cryptocurrency exchange rate, but the belief of buyers in it can seriously affect the market. Yet they make decisions based on their thinking.
And if everyone suddenly believes in the influence of halving and simultaneously buys BTC, then the cryptocurrency exchange rate will grow. In this case, halving will lead to an increase in the value of the cryptocurrency.
Before, during, and after the halving, it is crucial to have quick access to Bitcoin rates. By the way, Changelly widget offers you to check the valid cross-rates for Bitcoin to any other fiat or crypto currency.
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