What To Expect After BTC Block Halving in 2020Hello my dear friends!
Today I am here to provide you with some insights regarding the Bitcoins block halving in May 2020 and how it will affect the overall Bitcoins performance on the market. I believe everybody should be aware of this so it is my pleasure to share this with you. The information below is constructed from various research articles and personal knowledge based from experience. Hope you enjoy the read, I promise not to waste your time!
On May 20th 2020, the third Bitcoin halving will occur. 50% less Bitcoins will be generated every 10 minutes and this could change the value of Bitcoin forever. The halving is an anti-inflationary function that “Satoshi Nakamoto” (creator/s of Bitcoin) put in place to make sure the value of bitcoin was never pushed down by the supply increasing too fast. This function is described in the white-paper. Block halving tends to have long-term positive effects on the price of Bitcoin (just like in previous halving’s). This is mainly due to supply and demand. If fewer bitcoins are being generated, the newly increased scarcity automatically makes them more valuable, but this doesn’t happen right away unfortunately.
After the first halving, bitcoin went from around $11 to around $1,100 and back down to $220. Second time, Bitcoin went from around $230 to around $20,000 and back down to around $4,000. So for the next halving, majority of people are expecting history to repeat itself, only this time, sending bitcoin to perhaps a six-digit price. The biggest changes in the crypto ecosystem this time, will be the higher public awareness around bitcoin and the interest of institutional investors (hedge funds, banks, pensions, etc.). Increased public awareness could also lead to a wave of FOMO buying, which could push the Bitcoins price higher. When more financial institutions begin taking big positions, it could affect bitcoin in ways investors have never seen before.
What does this mean for the Bitcoin Mining Industry:
The acceptance of cryptocurrency by retails, investments by large semiconductor companies in mining-specific hardware, and the increasing demand for equipment manufactured in China are the emerging trends expected to gain traction by 2022. These trends will further add to the growth of the cryptocurrency mining hardware market size during the forecast period. The global cryptocurrency mining hardware market is expected to grow over USD 2.2 billion between 2018-2022. In fact, over 50% of the market’s growth will come from Asia-Pacific as the region is witnessing steady growth due to the extensive adoption of blockchain technology and cryptocurrency.
When the block reward halves, the price per Bitcoin compensates along with it. We have seen this process occur after every halving. Mining is a self balancing machine seeking to always be in equilibrium. The increasing number of product launches are expected to trigger the market growth during the forecast period. Vendors are making significant investments in research and development for developing innovative technologies and new products. It is safe to assume that after the block halving, there will be a high chance of large influx of new miners on the network, ultimately pushing the Bitcoins price higher.
Bitcoin is still at it's very early stages of growth and unfortunately we have to be patient with seeing it reach its new higher highs. Although now may seem like the perfect opportunity to acquire bitcoin for long term holding, in my personal opinion we can still expect multiple draw downs of the price, perhaps even reaching down to the $6,000 support areas. Usually at the end of the year we see huge volatility in the overall cryptocurrency market, ultimately pushing the Bitcoins price to either direction, creating potential investment opportunities.
Hope you enjoyed the read!
Note: I am not a financial advisor and am not responsible for you placing any trades on the digital asset.
