Bitcoin, the world’s largest cryptocurrency is also undoubtedly the most popular virtual asset as well. Since the cryptocurrency first came to the limelight over a decade ago, Bitcoin has not stopped being a fascinating story within the digital asset ecosystem. Now that we are less than a month away from the much-anticipated Bitcoin halving, let us look at how the even can change the course of the cryptocurrency as well as that of the industry’s.
New bitcoins are issued every 10 minutes by the Bitcoin network, Bitcoin Halving is an event where the number of Bitcoin rewards generated per block is halved (divided by 2). This event is programmatically scheduled every four years. The first halving took place in 2012, reducing the block reward from 50 BTC to 25 BTC. Four years later the coin’s block reward dropped again from 25 to 12.5 BTC. Now, in the 2020 halving, it will drop from 12.5 BTC to 6.25 BTC. With the upcoming halving, Bitcoin’s block reward is set to be slashed in half at block number 630,000. This will be the third halving in Bitcoin’s history.
One of the most popular theories in the cryptoverse was that Bitcoin will see a rapid increase in its price once the halving takes place. Although this is not a concrete fact, it still has not stopped members of the community from judging the peak till which Bitcoin could rise. A significant example to back this theory was the 2012 Bitcoin halving.
Bitcoin’s price witnessed more than $1000 a year growth after the 2012 halving. This pattern was repeated when the cryptocurrency’s value increase by $1400 one year after the 2016 halving. At the time of writing, Bitcoin was trading for $6,638 with a total market cap of $121.66billion.
A 3.9 percent decrease in value had brought the 24-hour market volume down to $34.18 billion. Investors and HODLers need to be careful with the market as it is not an established financial fact that Bitcoin’s price will definitely rise after the halving.
Cryptocurrency exchanges are expected to see a flurry of activities as they will be the focal point of trade. Popular exchanges can utilize that time to make positive market moves and affect changes that will be beneficial to the industry in the long run. May will also be the time when miners will see a massive shift in the way they make money. As the block rewards are going to be directly cut in half, the first people to be affected are the miners.
Experts stated that the miners who use outdated mining rigs will be left in the dust during Bitcoin’s halving. The halving comes during a period when world financial markets were facing its biggest recession since the Great Depression. Bitcoin’s hash rate may also dip as some operations may turn out to be unprofitable and eventually fold.