There is less time left before the third halving of the most famous cryptocurrency, and all analysts and experts are sure that the cryptocurrency market will change and will not be the same after the halving. But how is it going to be? We’ve tried to answer this question by analyzing the last halving of 2016 and its consequences for the crypto community.
It should be noted that halving 2020 will be the third in the history of cryptocurrency №1. The first one took place in 2012, the second — in 2016. Until 2012, miners received 50 BTC for each mined block, and the complexity of mining was so low, so it was even possible to mine cryptocurrency on a regular computer. Eight years ago, a reward for one block decreased for the first time and dropped to 25 BTC. After halving in 2016, the remuneration decreased to 12.5 BTC. What are the consequences of this?
In 2016, the BTC price hovered around $600 per coin. On the day of the last halving — July 9, 2016, 1 Bitcoin was worth $665. Right after the halving, the value of the cryptocurrency has dropped “down” immediately, but by September 2016 the price went up, and reached a historic maximum of 20,000 USD per coin 15 months later.
How could halving contribute to such an increase in value? In fact, it is very simple — Bitcoin is a decentralized cryptocurrency, which means that its price is regulated by supply and demand only. Historically, halving leads to reduction in the number of miners and has a positive effect on the price of BTC in the long term. If the number of miners gets smaller (and those who use outdated equipment are forced to leave the market, since cryptocurrency mining becomes unprofitable for them), then the supply is reduced, therefore, the price goes up.
By the way, the same conclusion is confirmed by the results of the CoinDesk research. Their experts have analyzed the two previous bitcoin halvings:
· 1st halving (11/28/2012): the price reached its lowest level 378 days before the event, then increased by 510%
· 2nd halving (07/09/2016): the price reached the bottom 539 days before the event, then increased by 309%
They also predict a new peak in the cost of Bitcoin. They suggest that the coin will reach it after the halving 2020. In their view, the cryptocurrency will start to go up in value immediately, but would move gradually, during several months.
Today, some experts compare bitcoin with gold, saying that the coin is underestimated. Moreover, Bitcoins can be freely and, most importantly, privately used and transferred between users, which makes it even more profitable and attractive.
By the way, halving 2020 is not the last in the history of mining. The next price reduction will occur, approximately, in 2024 (the block price will decrease to 3.125 BTC), and then — in 2028, when the block price will drop to 1.56 BTC. The latest halving will take place in 2138, 2 years before the last bitcoin will be mined, and after that the miners’ reward will amount to 0.000000005820766091 BTC per block. Even if bitcoin will cost $1,000,000,000, the reward will not be as big as today, because by that time, the commission for transactions will be the main source of income for miners.
Today, a couple of weeks before halving 2020, mining still remains one of the simplest and most profitable means of generating Bitcoin, especially when it comes to mining on modern highly profitable equipment offered by ECOS. Mining can become even more profitable after halving, as experts say, because it’s likely to lead to a decrease in the complexity of mining and an increase in the value of the coin.
