300% increase to bitcoin halving on May 12th – is the story from the past repeating itself?
300% increase to bitcoin halving on May 12th - is the story from the past repeating itself?
Bitcoin is only 117 days away from its block reward reduction event, which affects the number of tokens that can be generated every 10 minutes. Based on historical data, this event serves as a catalyst that drives the cryptocurrency’s flagship to new all-time highs.
Bitcoin goes through a fixed process known as halving each time 210,000 BTC blocks are mined. This is considered the central economic model in the BTC protocol, which guarantees an even issue of the coins. The halving takes place approximately every four years. It halves the rewards miners receive for mining a block, reducing the spend rate.
By May 12, 2020, at exactly block 630,000, miners who are currently receiving 12.5 new BTC for each solved block will only be rewarded with 6.25 BTC per block. The inflation rate of this cryptocurrency will also have an impact over a longer period of time as the future supply decreases.
The series of block reward events is planned until the total volume of 21 million BTC has been reduced. These events could continue until 2140. so it is expected that there will be miners in the next 120 years.
Since the launch of Bitcoin on January 3, 2009, there have only been two halves. These events have proven to be an important catalyst that drives up the price before and after the launch. BTC’s monetary policy has made it possible to significantly increase its value as scarcity increases.
Halving in 2012
On November 28, 2012, Bitcoin went through its first halving at the block height of 210,000 pieces. During this time, block premiums for miners fell from 50 BTC per block to 25 BTC. Such a significant reduction in supply had a major impact on the price of the cryptocurrency, which was perceived before and after the event occurred.
After hitting a market low of $ 2 on November 19, 2011, Bitcoin entered a year-long bull rally. The price of this cryptocurrency rose almost 500% in anticipation of the first halving. When the event ended on November 28, 2012, BTC was trading at $ 12. From that point on, Bitcoin rose 97-fold and hit an all-time high of $ 1,177 on November 30, 2013.
The Halving 2016
The second halving took place on July 9, 2016 at a block height of 420,000 pieces. At that time, the 25 BTC mining reward was halved to 12.5 BTC per block. Like the first halving, this had a serious impact on the price of Bitcoin.
On January 14, 2015, after the bear market in 2014, Bitcoin hit a market low of $ 164. Since then, BTC has risen nearly 300 percent to a high of $ 650 the day it was halved. Months after the halving, BTC went back to a parabolic rise that increased the price 29 times. Bitcoin hit an all-time high of $ 19,765 on December 17, 2017.
The story repeats itself
The halving so far has proven to be an essential linchpin in the trend of Bitcoin. They tend to push the course to new all-time highs. As a result, the upcoming block rewards reduction event could have similar effects.
So far, it seems Bitcoin has bottomed out on December 15, 2018 at a price of $ 3,150. Since then, this cryptocurrency has increased over 180 percent and is currently trading at $ 8,800. Investors seem to be expecting higher prices as the halving date approaches.
Alex Kruger recently conducted a survey on Twitter that over 4,000 participants took part. Kruger asked his followers what they think will be the highlight of the year for Bitcoin.
The results show that 47 percent of respondents believe BTC will trade over $ 20,000 sometime this year. Around 28 percent are convinced that Bitcoin would peak between $ 14,000 and $ 19,999. The remaining 25 percent said BTC would trade at $ 13,999 or lower.
The survey shows that almost 75 percent of participants believe that the price of Bitcoin will double this year.
What will be the high of the year for $BTC?
— Alex Krüger (@krugermacro) January 14, 2020
With that in mind, some of the crypto community’s most prominent technical analysts confirm that Bitcoin entered a new bull market last week. Breaking the $ 8,500 resistance mark was seen as a make-or-break point that could have set the stage for a bull run. According to Mohit Sorout, a partner of Bitazu Capital, a new upward trend is emerging.
However, there are other analysts who do not yet agree with the bullish outlook. For example, since December 27, 2019, Chris Slaughter, the founder and CEO of LVL, has been investigating a fractal that has proven to be correct. This pattern anticipated the recent rally that brought Bitcoin over $ 8,500. Now Slaughter estimates a market downturn that could push BTC to “new lows”.
The different perspectives on the future of Bitcoin have put the general market sentiment in a “neutral” state, according to the crypto fear and greed index. It remains to be seen whether history repeats itself and the forthcoming halving triggers a capital inflow in the market, which enables BTC to reach new all-time highs.