Bitcoin halving what will happen to the price?
Bitcoin halving what will happen to the price?
The reward for mining Bitcoin is expected to see the second halving in its history later this year, potentially in June or July.
The one major data point we have is the last halving, when the price went from $12 to $233 and increased from there later.Brand-new bitcoin creation will be half what it was previously. To figure out the outcome look at the incentive on miners under this assumption .All of a sudden they won’t sell any bitcoin they mine, because they’d lose money doing so. Supply shock.What’s more, miners must figure out a mode to pay their expenses in some way , in time , so when the price of mining is higher than the price of bitcoin, I’ve heard that miners don’t sell, they buy. That way when the price inevitably rises they can make back their current losses at least somewhat.The result is massive supply shock and a quick upward-shooting price. It’s not just 3600 new bitcoin a day disappearing from the market, it’s virtually all of it.Combine that with speculation that price will rise, resulting in even fewer people selling, and you have one interesting scenario.
Some reason that the Bitcoin community has been fully aware of the halving of miners’ reward for a long time and that the actualised decline in the supply of bitcoins will not affect most Bitcoin enthusiasts and traders in the community. Price and mining are not connected . The price has dropped considerably and mining has gone up substantially lets say for the last year. The all Time High was also clearly unconnected to mining. You won’t get large scale mining without it making financial sense. If the price was £1 per bitcoin, then people would be doing it at home still for a bit of fun, no companies involved . As the expenditures of mining is more than the cost of production, it makes financial sense to mine.
Somewhere in the middle there is a sweet spot where the financial rewards are able to cover the cost of mining, if it doesn’t cover the cost, people switch off, and the hashrate drops, but the rewards for those left rises, so if you can stay in the game and make money you should.
We don’t really have enough subject matter to prognosticate what will happen, but, you can bet your bottom dollar if the price stays the same or even goes down after the halvening there will be a massive reduction in the hash rate.
What about a halving disaster?
The halving disaster death spiral is the most urgent prospective problem for bitcoin. It is not a hoax. That makes no sense. Bitcoin has already experienced extreme delays on a day when the trading pressures weren’t that great.
This video explains it well.
I can realise someone saying it won’t occur but to say there is no such thing or it’s a hoax (huh?!? What magic has been performed?) is duplicitous and an attempt to lull people into a false sense of security.
If it’s going to happen, it’s coming very soon and we need answers. If we don’t get any answers from Core, that is a problem.
The price increase won’t happen. It cannot take place because it would come with an increase in activity which cannot happen due to the cap. All the people out there who anticipate bitcoin to rise in price on the halvening and want to either buy or sell will be disappointed because bitcoin won’t function due to the blocksize cap. Think back when bitcoin price used to top out all the time due to trading confinement at mtgox? This will be like that but worsened as it is not one exchange failing to service transactions, it’s the entire bitcoin network. And when the crowds figure out that not only can’t bitcoin rise in value but it doesn’t function well either they will try to sell. Of course even selling won’t be easy and will take time and that is what will feed the death spiral as price falls, more miners quit, the network gets worse, more people sell, price falls, more miners quit, etc.
Anyone still holding bitcoins into this event are fools. Be in cash so you have the means to buy bitcoin on the collapse that is sure to happen. Just don’t buy too soon and don’t hold for long. Buy on collapse and sell any bounce. Do so on an exchange, not on the blockchain as the blockchain won’t function well. This is the end of bitcoin’s lead, you don’t want to be holding long term anymore. There are other options out there whose leadership hasn’t run the ship aground, those options will take the lead from bitcoin.
Bitcoin trading volumes will go through the roof during the halving. However, daytraders will need secondary assets (like ether) to park their money as they move in and out of bitcoin, increasing demand for other cryptos.
Bottom line, ether is likely to do well no matter what happens.
Relevant “Trading Places” quote: https://www.youtube.com/watch?v=7EjdC0pjo1A&feature=youtu.be&t=86