Bitcoin price is always largely influenced by the halving. Bitcoin’s halving is easily the most anticipated event in the crypto industry today. The next halving is expected sometime in May 2020 and many believe it will spark the next Bitcoin rally. Since late last year, there have been many forecasts about what the halving will do for the king coin. A new report has now suggested what is probably the most bullish forecast for the world’s number one asset. According to Beincrypto, Bitcoin will hit $400,000 after the halving.
The Bitcoin halving is an event that occurs after every 210,000 blocks are produced, usually taking place every four years. At every halving, the block rewards received by miners on the network is cut by exactly 50%. At the moment, miners receive 12.5 BTC per mined block. After May, this figure will drop to 6.25 BTC.
When there’s a shortage in the supply of anything, its value usually increases. This is the best way to explain why Bitcoin’s price always skyrockets after a halving. But is $400,000 possible or is it just a bullish pipedream?
Bitcoin Price Will Hit $400,00 after May’s Halving
The report highlights the history of Bitcoin halvings.
The first halving took place in November 2012. Bitcoin was trading at $2.01 and then jumped to $270.94 after the halving. The $268.93 leap was an increase of 13,000 percent. Years after, in July 2016, Bitcoin had its second halving. This halving pushed the Bitcoin price from $164.01 all the way to a mouth-watering $20,074. The increase, this time, was 12,000 percent.
Following this trajectory, Bitcoin could very easily shoot up to $400,000 after the May halving. Technical and trading analysis platform Rekt Capital also published an analysis back in September 2019 that has corroborated the possibility of $400,000.
First is the possibility of a new all-time high which happens after every halving. This means that even if we don’t see $400,000, we will see a new record high.
Second is the percentage increase. Bitcoin’s history suggests that at every halving, there is an increase of between 12,000 and 13,000 percent This buttresses the possibility of a $400,000 figure.
The third possibility is another post halving bear market. The Rekt Capital article highlights the possibility of a bear market after May’s halving. After the first halving, a bear market began in 2013 and went on for almost 87 days. During this time, Bitcoin shed over 80% of its weight.
A similar occurrence happened after the second halving which saw Bitcoin enter a bear market that lasted more than 51 weeks. It didn’t end until early 2019.
Based on this, and regardless of what happens to Bitcoin’s price, the community should expect a bear market this year.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.