Home Bitcoin 2020 Bitcoin halving, effects on crypto holders

2020 Bitcoin halving, effects on crypto holders

After every four years, according to laid down regulations by Bitcoin’s pseudonym creator, Satoshi Nakamoto. Halving, a process, where the entire block rewards provided to miners are split into two, takes place. 

The process is a periodical event when cryptocurrency production is cut by 50%. It slashes the amount of coins bitcoin miners get and is scheduled to hold May 2020. During this time, the amount of Bitcoin cryptocurrency entering into circulation is reduced. While at the same time, mining costs for securing the network increase.

Bitcoin alongside many other cryptocurrencies being a decentralized token requires to be moderated occasionally. 

Halvings are at the core of the cryptocurrency economic models because they ensure coins will be issued at a steady pace, following a predictable decaying rate. This controlled rate of monetary inflation is one of the main differences between cryptocurrencies and traditional fiat currencies, as they have an infinite supply.

Reportedly, in the history of Bitcoin, there have only been two previous Bitcoin halving events. These events occurred 28th, Nov. 2012 and 18th, July 2016 with Bitcoin priced at $12.31 during the first and $650.63 during the second. 

Also, it is being said that throughout, there will only be 32 bitcoin halving events. Once all of these have occurred, there will be no more halvings and there will also be no more Bitcoin created as the maximum supply will have been reached.

2020 halving: Analysts react, says run up imminent

As the entire crypto world awaits the 2020 halving event, pundits are beginning to predict and speculate as to what should be expected after the event. 

Many analysts reportedly agree that the coming halving will trigger a run-up in Bitcoin price, and by extension other cryptos as the market mover and most paired token, dragging the rest of the cryptocurrency market upwards with it. 

Nunya Bizniz, a Bitcoin advocate while analyzing the previous halving explained that a 50% dip and then a climb upwards during the 120 days before the first halving in 2012.  

In 2018 however, 120 days before the event was a stellar 88% upswing, followed by a 30% crash. A recovery further proceeded this, and then another crash after the halving had occurred. 

From these two previous experiences, it can be said that there is no precise expectation to follow these years halving as past performances can not be taken as an indicator of future performance.

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