Bitcoin: “The party goes on”

Bitcoin: “The party goes on”

Miners have nothing to laugh about. From May next year, they will only get half for their mining services. The so-called halving has already happened twice, with positive course jumps months before and after the actual halving event. The Bitcoin should profit from this and continue to climb. Before the halving a lot of exchanges and btc casinos prepare for the coming next hype.

What does halving mean?

Because BTC is going parabolic again (more info https://londonlovesbusiness.com/), miners make their computing power available in the blockchain network and receive a reward in the form of Bitcoins. “The amount of the reward, however, does not remain constant. It is halved after reaching a certain number of Bitcoin blocks. The Bitcoin network therefore follows a linear scheme. Halving takes place after 210,000 blocks. At the current mining speed of ten minutes per block, 210,000 blocks take about four years to complete.

  1. In 2008, the miners received a reward of 50 bitcoins for every bitcoin block excavated.
  2. This reward was reduced to 25 bitcoins four years later (2012), and then to 12.5 bitcoins in 2016.
  3. It is expected to be 6.25 bitcoins per block from May 2020,” says Salah Bouhmidi of IG Markets.

Reward falls – Bitcoin rises?

If you look back at the two historic Bitcoin halvings, you can see that in the run-up to the two previous halving events there were long-term rallies on the Bitcoin course about a year earlier. “Followed by corrections and subsequent new all-time highs. Furthermore, it could be observed that the market had already priced in the price development in the past at an early stage. Halving could therefore also be seen as a technically induced price driver. This behavior could be repeated this year. The upward trend that has continued since April could be an indication of this. The BTC/USD has risen by almost 200% since April. In relative terms, the halving leads to rising costs for miners as well as to a slowdown in prospecting growth. This in turn means that the entry hurdles in Bitcoin mining are increasing and market concentration is rising.

A Bitcoin mined in the future will thus become relatively more cost-intensive and less profitable. The result could be a shortage of supply and thus rising prices. This behaviour has already been observed in the two previous halving events.

  • About one year after the first halving, the BTC/USD reached the psychological mark of 1000 US dollars for the first time in December 2013.
  • Only 18 months after the second halving, the Bitcoin reached its all-time high in December 2017 at just under USD 20,000. For long-term investors, the next halving could thus provide sustainable and positive impetus,” concludes Salah Bouhmidi of IG Markets.