Bitcoin halving is scheduled to take place this May. Halving is the short name they call for one of Bitcoins’ most memorable events. Bitcoin happens every four years and two of them have occurred in the past. During May, the number of block rewards or BTCs taking part in circulation every 10 minutes will fall by 6.25 from the current 12.5. Here the supply is expected to come down, but the demand remains the same. This cryptocurrency prices go up as a result.
Based on the two earlier block reward halving events in the past, the price of Bitcoin fell before and after the event. The same is true while the May 2020 halving is drawing near. There is a theory that says miners strive hard to sell before the halving to be able to collect enough Bitcoin to sustain their operations a couple of months after the halving. It enables them to hang on to the Bitcoins they mined. According to the experts, The break-even price of BTC mining is from $7000 to $15,000 after the event.
bitcoin halving has not showed any opposite relationship with gold and stocks. The coronavirus pandemic has made many investors jittery. Out of desperation, they have started selling different types of assets regardless if they have a risky or a risk-free nature. Just this February, gold, stock, and BTC have started to move in a similar manner and everything began to react the same way as macro events. The virus may not impact the price, but it certainly has an effect on the supply chain of mining manufacturers and miners.
Halving or halvening may sound like a term from a horror movie, but it is a highly anticipated in Bitcoin’s history. The allure of the possibility of having riches is what draws a lot of attention to the event. In this event, the amount of supply that enters the system shrinks but theoretically the demand stays the same. This perhaps drums up the cryptocurrency’s price. This has brought debates on Bitcoin price predictions and the market’s response.
The pseudonymous creator of Bitcoin which is Satoshi Nakamoto simply disappeared one year after the software was introduced to the world. Nobody knows if it’s an individual or a team that makes up that pseudonym. The owner of that pseudonym is no longer around to explain why this particular formula is used for adding Bitcoin to the circulation.
However, early emails from the pseudonym gives some clearer indications of what the entity had in mind. Shortly after the release of the white paper, Nakamoto created a summary of all the ways in which their chosen monetary policy could play out in the circulation. This includes considering all the possible circumstances in which this could lead to deflation or inflation. Deflation is the condition wherein there is an increase in the currency’s purchasing power and inflation is when the prices of all commodities and goods that can be bought by currency increase.
During that time, Nakamoto didn’t know the number of people who would use the brand-new money online.a