What Does the Impact After the Bitcoin Halving Incident? What exactly is the halving event? How will the price affect? Do you find yourself having problems like this? Let’s talk a little bit about what ” bitcoin halving” means. And why the price of Bitcoin fluctuates during this “halving”.
What is Bitcoin Halving?
As the name suggests, halving means “to halve something”. In the cryptocurrency mining business industry. The term use to be refer to a halving of the issuance of virtual currency.
In addition to Bitcoin, cryptocurrencies such as Bitcoin Cash, Litecoin, and Monacoin have also halving. But here, we will specifically study the upcoming Bitcoin halving. The term “Bitcoin halving” refers to the halving of Bitcoins supplied to the market in the form of mining bitcoin rewards.
After the halving event occurs, supply will cut in halving. And if demand decreases disproportionately, prices can rise significantly. We will explain later why “could” is use instead of “will”.
Bitcoin has experienced two halvings, this time being the third. With the upcoming Bitcoin halving, the mining reward will halving from 12.5 BTC per block to 6.25 BTC. As the past halving has witnessed a sharp increase in the price of BTC. The incident has recently caught the attention of new investors.
How Will the Halving Affect the Bitcoin Price?
As of April 2020, around 1,800 new BTC a generate on the network every day, but after halving. It will reduce to 900 BTC/day. Prior to the 2020 halving, around 18.37 million BTC had been mining. Accounting for about 87.5% of the total, and in the next 120 years, only the remaining 12.5% could mining.
Based on this alone, one would expect the price of Bitcoin to rise due to a decrease in inflation. But it should understand that the price of Bitcoin is also dependent on other factors. The stock-to-flow (S2F) ratio can use to lower the theoretical halving price of BTC, which indicates the scarcity of BTC. However, this analysis is based entirely on the supply of BTC and does not consider the demand or withdrawal of miners from the market.
Halving means that the mining reward for each block decreases as the inflation rate decreases, so the attractiveness of mining can decrease, and miners can withdraw from mining BTC or start mining alternative currencies. If this happens, the value of the Bitcoin network will decrease, which could impact after the Bitcoin Halving for the price of BTC.
When predicting future prices, it is necessary to fully consider the behavior of the demand side and the miners. While this is hard to predict, after the halving, the annual supply of Bitcoin will drop from the current 4% to 2%, making it more likely to benefit from increased demand.
Even though the halving is a one-off event, many people take it into account because they always know what will happen. Be sure to adopt a calm trading approach.
When Will the Third Bitcoin Halving Occur?
The impact after the Bitcoin halving occurs approximately once every four years. The next halving time is expected on May 11 or 12. Is there a reason why the date and time can’t give in a more specific way. Because only the developers there know when exactly it happened.
The measurement of time we commonly use can express in terms of “hours, minutes and seconds”, and elapsed time by the number of seconds, minutes, and then hours. On the other hand, Bitcoin time is measured in blocks, not seconds.
For example, the next Bitcoin halving schedule for mid-May 2020 could represent by the number of blocks generated, which is 630,000 blocks. However, the time it takes to generate a block can only express as “approximately”, not a completely constant time interval. It cannot accurately represented by the date and time we are familiar with normally.
The Bitcoin halving occurs every 210,000 blocks (roughly every 4 years) and will continue until the last 21 million Bitcoins are mined. The odds can estimate at around 2140. This means, as the supply of Bitcoin across the network will decrease over time, the Bitcoin inflation rate will fall whenever it is divided by two.