This post was most recently updated on May 15th, 2020
The Bitcoin Halving is coming soon. Many assume that the Bitcoin price will also rise afterward. What can investors expect?
Bitcoin Halving and the Bitcoin Course
Bitcoin halving takes place approximately every four years, or every 210,000 blocks in BTC time. The reward that miners receive for successfully mined blocks is halved. The next halving is due on May 12th, the miner’s reward will decrease from 12.5 BTC to 6.25 BTC. This supports the deflationary supply structure behind the digital currency. Because there will be a maximum of 21 million units of the cryptocurrency, after that it’s over.
The basic economic principles of supply and demand leave a bullish hope for the Bitcoin price: If the demand increases with falling supply, the Bitcoin price should also rise.
Stock to Flow – feed for the bulls
PlanB, an anonymous crypto analyst, took the monetary policy behind BTC as an opportunity and applied the so-called stock-to-flow ratio to the crypto asset. This calculates the rarity of a good and is originally used for precious metals such as gold. After applying this model, the rarity of the cryptocurrency would soon be higher than that of gold. Based on past data, the cryptanalyst calculated a bitcoin price of $ 288,000 after the halving. However, his analysis is not scientifically complete. The model is based on only six data points and is necessarily modeled only from past data.
Bitcoin price explosion?
In addition, the upcoming halving is not secret knowledge. Traders and other speculators mostly know about the market mechanisms behind BTC, one can assume that the knowledge is already “priced” into the market. But this assumption – culminating in the efficient market hypothesis – is not ultimately confirmed either.
The best way to assess the further course of the Bitcoin course is to look at it with all the necessary neutrality. You will see, compared to other cryptocurrencies, that nothing is eaten as hot as it is cooked.
This is not investment advice, just the analyst’s assessment.
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