THINKING ABOUT 2020 BITCOIN HALVING AND ITS EFFECT ON CRYPTO INVESTORS?

Every 4 years, roughly as we know, a Bitcoin halving occurs! With the next one expected to happen in May 2020.

So, for crypto investors what would it mean? Read ahead to know more…

As we all know, Bitcoin halving is an event that halves the rate at which new bitcoins are generated, in other words that cuts the bitcoin mining rewards in half.

It generally occurs in the intervals of 210,000 blocks or once in 4 years. For keeping the inflation in control, the bitcoin protocol was programmed with the hard limit of 21 million, mimicking the increased difficulty of gold mining.

So, in the upcoming halving, instead of 12.5 BTC, the block reward is to be halved in May 2020 to 6.25 BTC. Which means that only around 900 coins will be created instead of the current number being 1800.

Thus, we can say that the annual increase of the total Bitcoin money supply will fall by more than half to 1.8%.

Economically, lesser new bitcoins mean reducing supply growth.

Now Bitcoin miners spend part of the newly mined Bitcoins OR send them to the cryptocurrency exchanges for being able to pay for electricity and other costs.

The crypto traders will now fight for lesser Bitcoins and at the current demand, it would show surges in the prices of Bitcoins.

This has been the scenario with the earlier 2 halving and hence the investors cannot wait for the next halving to occur.

A famous American author/writer quoted saying-

“History does not repeat itself, but it often does the rhyme.”

However, it is argued that Bitcoin ecosystem is very different today from the previous halvings. Secondly, that being said, halving had already priced in, and was the reason for the rally from $3000 to over $13,000.

Conclusion- Hereby conclude that, halving is really an important event for Bitcoin and is unpredictable as to how it will affect the industries and crypto prices.

Word of caution- Avoid phishing websites and solicited advises.

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