Why halving Bitcoin will not bring cryptocurrency investors with mountains of gold

Next month will be the so-called halving — that is, reducing the rewards per block Bitcoin twice. After that the new coins will receive twice less, and cryptocurrency in theory will become more rare. Because after two or three months after the previous two haligov the rate of BTC has gone up, coin holders expect the same scenario this time. Tell why you should not count on him.

The contents

What is halving Bitcoin

Halving Bitcoin — procedure to reduce the rewards for a Bitcoin block twice. Miners receive this award if they find a new block crypto currencies. At the moment it is a very difficult task: finding a units are millions of miners around the world.

Immediately after the launch of the network Jan 3, 2009 cryptocurrency miners received for each block of 50 BTC. In November 2012 took place the first halving in the history of the project, after which the reward has dropped to 25 coins. In July 2016, was the second halving: he lowered the reward to 12.5 BTC. In mid-may 2020 will be the third halving. As you correctly counted, after each block will yield 6.25 BTC.

The procedure of halving not tied to time, and to blocks. It is held every 210 thousand units. In their production the miners need about four years, but the exact date is impossible to predict. The number of miners in the network are constantly changing, so the blocks are mined faster or noticeably slower.

Halving Bitcoin is not just a joke or a whim of its Creator Satoshi Nakamoto. Thanks to him, the maximum number of bitcoins will not fly in the sky, as it happens with the same dollar. In the end, coins will be 21 million — no more and no less.

Халвинг Биткоин

Halving Bitcoin

By the way, you can get the last a coin in the year 2140. Read more about mining in the future you can read in a separate article.

We prepared a special long article on halving. Inside there is also the fate of the miners after the procedure, the impact on the course and more. We recommend you read.

Why everyone is waiting for Bitcoin halving

The answer is simple — in the hope of a cool earnings. Look closely at this graph. Green arrows indicated the previous halving.

график биткоин халвинги

Graph of Bitcoin exchange rate, indicating haligov

All right, shortly after Halimov came bullrun, that is serious growths rates of cryptocurrencies. Although “soon” is a relative term. For example, since halving in July 2016, to record exchange rate of Bitcoin it’s been almost a year and a half.

биткоин график 2016 год

Graph of Bitcoin exchange rate in 2016

In July 2016 BTC was $ 650. The second of January 2017, the cost has risen to 1027 dollars, may 25 — up to $ 2,700. 10 thousand took in November, a record set on 17 December.

Conclusion: since halving to active growth took place at least several months.

Should I rely on the rise of Bitcoin halving

The relationship of halving Bitcoin and the growth rate seems at least far-fetched. As we have seen, since the procedure before the growth took place for several months. Accordingly, the niche cryptocurrency developed, users conducted a transaction, and the hackers were stealing other people’s coins — and all this for at least six months.

That is, after the procedure before the growth of the market there were very many events, but fans of the cryptocurrency continue to believe the reason bullrun it halving. If this is true? Probably not.

Perhaps the reason for the growth of BTC to 20 thousand was the cancellation of the first application for a BitcoinETF from the twins-billionaires Winklevosses in March 2017? Many people believe that because of her, in the Wall Street Journal published an article about Bitcoin, which allegedly led “smart money” funds in a niche.

Халвинг Биткоин

Halving Bitcoin in practice

Or, the market raised investors who were inspired by the rise of BTC to $ 1000? The idea that important events after halving 2016 was a lot. Therefore consider it the only cause of growth — and certainly hope for a repeat scenario cannot.

Most likely, bullrun in 2017 started because of a whole set of events. One of them definitely was the coverage of the topic of Bitcoin and cryptocurrencies and classic media and TV. Recall that in late summer on TV have already talked about “the wonder-stuff that cost three-four times less than just six months ago.”

So hope for a new stage in the growth of Bitcoin and cryptocurrency market in General at the end of 2020 is not worth it. At least solely because of the may of halving.

Why halving Bitcoin will not send the course of bitcoin to the moon

All that was written before that — reflections. Now let us turn to mathematics.

The first argument

Today, the network’s first cryptocurrency has 18.31 million bitcoins. This is as much as 87 percent of all possible BTC. The turnover of traders over the past day, equivalent to 34.65 billion or 4.74 million bitcoins.

биткоин курс капитализация

Indicators Bitcoin April 9, 2020

Part of those billions surely provide shopping bots that including simulate activity on certain exchanges. Overall, however, the indicator of this.

Now remember new bitcoins, which are formed due to the extraction of blocks of miners. The average BTC block is created every ten minutes, that is six blocks per hour and 144 block per day. Under the current reward of 12.5 BTC have approximately 1,800 new bitcoins per day. That is the equivalent of 13.15 million dollars at the current exchange rate at 7309 dollars.

After halving indicators will be reduced by half. A day the network will create 900 new bitcoins or the equivalent of 6.57 million dollars in the same course. That is, the emission is reduced by the same 6.57 million dollars in comparison with today. And 6.57 million is 0.0001 percent of the current daily trading volume of BTC. 0.0001 percent.

Even if you take the whole year, the amount of the reduction will be only 6.83 percent of the daily volume. Again: the emission reduction of coins for a whole year after halving in the network of Bitcoin will be equivalent to only 6.83 percent of the daily trading volume of the cryptocurrency.

The indicators are incomparable, that is, the proportion of reducing the release of new bitcoins is very small. Obviously, this drop in the sea enough to make Bitcoin incredibly rare asset and send it to the course space.

On the whole, it is not rare: the miners has produced 87 percent of all bitcoins. Even without halving left really new coins.

The second argument

Or another example. Here are the data of the cryptocurrency market-16 December 2017, when Bitcoin was approaching its peak.

курсы криптовалют 2017 год

Data cryptocurrency market 16 Dec 2017

The rate of BTC is 19140 dollars, which is 2.6 times more of the current value. While bitcoins in circulation 16.74 million, which is 9 percent less available coins today.

Available bitcoin was only 9 percent less, that is , the cryptocurrency was a bit more rare. However, the rate was higher by hundreds of percent. The proportion is clearly violated, as can the rarity of cryptocurrency — and this is the main argument fans of halving — nothing to do with it? Something tells me that it is true.

The third argument

Funny thing: in circulation today is 18.31 million coins. Accordingly, for the next 120 years remains mined a little less than 2.69 million bitcoins.

This is at 1.76 times less than the equivalent of today's trade volumes. That is, the market already provides volumes that are ahead of the amount renamining bitcoins. The impression is that if you stop issuing new bitcoins today at around 18.31 million coins — nothing will change. And these bitcoin will be enough for a new course record. At the end of 2017 it was enough.

криптовалюты биткоин 2017 год

Same Here in 2017

The conclusion is clear: the influence of halving of Bitcoin in the cryptocurrency rate is overvalued. Yes, coin had arranged flights into space after a couple of months after the procedure, however, occurred many important events. They could also have an impact and influence what is happening in the niche.

Finally, bitcoins in circulation, and so lacking. The new coins remained relatively few, but to reduce the already small number of means to reduce the role of a specific event.

In General, you can count on the incredible growth rate of the BTC after some number of days after halving not worth it. Most likely, it will not work. Yes, and Bitcoin will arrange themselves Here without it, isn’t it? You just need to wait.


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