The Bitcoin Halving is Coming on May 12th: What You Should Know
At the time of writing, we are currently one week away from the next Bitcoin halving. To say that the world is holding their breath in anticipation would be a massive understatement. With the price of Bitcoin almost scraping $9,000, many wonder what impact the halving will have on the top-performing asset. While there are many speculations and promises being made about future performance, it is best to understand the potential implications and approach investing with care. In order to learn what may be on the way, here is some further information regarding the halving and what the possible results may be.
Goodbye Retail Miners?
Arguably one of the biggest impacts on Bitcoin will not necessarily be on its price but on its miners. Once block rewards are reduced by 50 percent, not everyone will be able to continue to mine profitably. While the major players will still be able to continue their options relatively unimpacted, smaller mining operations may not be able to keep up with their larger counterparts.
Of course, this depends entirely on the price of Bitcoin. If it rises and miners are able to recoup their hardware costs, they may still be able to continue operations. If the price of Bitcoin takes a hit, however, it could affect many miners.
Experts Expect Price Increase, But the Question Is When
The big pitch and excitement surrounding the Bitcoin halving is based on the previous halving event, which many think indicates that the price should experience a boost after the halving. What some may not be taking into consideration, however, is that the price of Bitcoin had to fall before it experienced a subsequent rise. In fact, the previous halving resulted in a 30 percent price decrease. Additionally, gains were not experienced immediately. Instead, it took approximately 12 to 15 months before gains were realized.
This is not to say that Bitcoin is going to be ruined by this halving. However, if history has taught us anything, it is to notice previous patterns and anticipate these repetitions in the future.
Keeping an Eye on Global Developments
The previous Bitcoin halvings took place in a much different setting. Before, Bitcoin was a revolutionary payment alternative that was struggling to find its footing in the world. Now, Bitcoin is well-known in the finance industry and is being hit with the same issue that is impacting the rest of the finance industry: COVID-19. That said, Bitcoin’s unique design that serves to prevent inflation and give full control to its owners have helped it thrive in these conditions as well. No matter whether a positive or negative development, it is important to keep your eye out for news stories that could work for or against crypto.
As the Bitcoin halving approaches, knowing what to look out for both now and in the future is the best way to anticipate any changes. Hopefully, we can maintain this optimism and strong sense of excitement well beyond the halving itself!
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