Bitcoin halving and how it has affected the price

The rare and mysterious Bitcoin halving is coming up soon. Around every four years, there is a decline in the reward for what it takes to mine Bitcoin, also known as BTC. While many are not familiar with this process, it is nevertheless hard-wired into Bitcoin by it’s creator, Satoshi Nakamoto. Delving into the details, we find that this next halving will be one of the most interesting.

The Bitcoin halving explained

The BTC system was created by a person acquainted with how economies work. The end result is that Bitcoin is designed to succeed as a currency that will prevent the ability of small groups to inflict inflation or deflation upon it. The halving is a part of this. It may sound complicated, and to many it is. Physically what happens during a halving is that miners are rewarded with half as much BTC for mining (finding) a block in the blockchain. Today those who mine BTC get a reward of 12.5 BTC for finding a block. Sometime in May of this year that reward will halve to 6.25.

The demand for this cryptocurrency will rise

This Bitcoin halving is part of the process that creates scarcity. For example, think of the price of Rolex watches. Some models are not produced in high volume. This creates scarcity which also creates a higher price per watch. The same happens with each halving of BTC. Less BTC is rewarded for finding a block in the blockchain. This scarcity will make the demand go up. There will be less new BTC created per day. Not only that, there is a limited supply of BTC, capped at 21 million. Nearly 18 million Bitcoin have already been mined and are in circulation. This means people will be fighting hard for those last few million, creating a spike in demand.

Bitcoin halving dates and history

BTC has been halved two other times in history. In 2012, the first halving happened on November 28. The halving in 2012 was immediately followed by the highest all-time price in that BTC history. This was the year that a legal drama named, “The Good Wife”, was aired on CBS. In the drama, the cryptocurrency was the topic of the entire show. In the same year the host of “Mad Money”, Jim Cramer, played in a scene where he claimed BTC was not a true currency. His reason? There is no central bank to control it. This is the year the highly popular content management system, WordPress, started to accept BTC for payment.

In 2016, the second halving happened on July the Ninth. This is the year Japan recognized BTC as equal with other forms of currency. A paper was published that showed that this cryptocurrency was supported more by legitimate activities than illegitimate ones. The number of automatic tellers that dealt with BTC doubled. A Swiss railway operator started to integrate the ability to buy BTC into their ticket machines.

Bitcoin halving 2020 date

In the Spring of 2020, the next halving will occur for the king of coins. May is the target month if all goes according to current trends. Bitcoin halving 2020 will be the third in the series. There will only ever be 64 halvings. In May the reward for mining BTC will be cut. The result will be a slower supply of new BTC. As mentioned, this is incorporated by the creator to keep the market healthy.

A Bitcoin halving price prediction

The last halving did not produce an immediate spike in price. But what happened soon was interesting. Eighteen months later the price of BTC climbed to its all-time high of $20,089.00 USD. Was it related to the previous halving? Some seem to think so. The same type of event in 2012 did not produce an immediate spike in price. But one year after, the price did spike to $1000. Again, for this time-frame, $1000 was another all-time high.

Everyone can see and predict the approximate month of when the BTC reward will halve. It is no secret to those who are connected with the inner workings of this crypto. The geek crowd already knows that “halvenings” happen around every four years. But the majority of people have never heard of halvings just like they do not know the inner workings of the US dollar. What appears to be happening goes right along with the thinking of Satoshi. The normal economic rules of supply and demand are controlling the price of BTC. In other words, regular market pressures control the price and availability of this crypto coin.

Thanks to the popularity of BTC, there are plenty of predictions to consider. One Bitcoin halving price prediction is a drop to $3000. Others say a three-year window will produce prices of $160,000 USD. For those that follow other indicators, such as market penetration, the price will be even higher. A conservative measure is to simply look at history. The spikes in prices from the other two examples happened within a year to 18 months. They both produced the past all-time highs. Doing this simple comparison, a Bitcoin halving price prediction of $160,000 USD is not unthinkable.