Bitcoin News Today – In May 2020, a major event will take place in the cryptocurrency space. Bitcoin will be having its ‘halving’ event. This is a process where the value of block reward or BTC is reduced to half of its value. Bitcoin has had two previous halving events; one was in 2012 and the other happened in 2016. Unlike conventional currencies that can be printed whenever there is a need to, Bitcoin currency is fixed. Initially, the block reward or value of Bitcoin was 50 BTC but was reduced to 25 BTC during the first halving process. Another halving occurred in 2016 and reduced the BTC to 12.50. The next halving will bring the value of BTC to 6.25
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Bitcoin’s halving process is programmed to kick in whenever mining reaches 210,000 blocks. This value is normally reached every four years and the next halving event will occur in the month of May 2020. Analysts predict that this halving event will mean a reduction of miners as the price of bitcoin drops. There are speculations that 70 percent of miners may drop down due to the reduction in the price of bitcoin.
Crypto analysts like Tone Vay predicted on Twitter that the price of bitcoin would fall to $5,000 during the upcoming halving event. He further speculated that about 70 percent of miners would bow out due to the inability to acquire blockchains or the loss of revenue due to the drop. In response to Tone Vay, other analysts envisage a surge in the value of bitcoin just months before the halving occurs, which would be followed by miners dumping bitcoin as its value drops.
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Bitcoin halving process leads to a surge in the value of BTC, though it doesn’t occur immediately after the halving process. This happens due to demand and supply. To further explain how halving affects the change in the price of BTC, let’s look at the current block reward. The BTC value is 12.5 and monetary value of $5,000. Taking the estimated mining value of 4,380 blocks per month, a total of $273,750,000 is acquired as the total revenue per month.
With the upcoming halving bringing the BTC value to 6.25 and other figures remaining the same, $136,875,000 is the projected revenue. This is why crypto analysts are foretelling a sharp drop in the number of bitcoin miners. During the first bitcoin halving process, the value of bitcoin rose from about $11 to well over $1,000 in 2013. The price became stable at about $220 and remained like that for the following years.
The bitcoin halving of 2016 saw the value of BTC rise from its steady value of about $500 in the months after the halving. These patterns show that the value of BTC drops during the halving period then rises as the demand for bitcoin grows.
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Following the two previous halving processes, it can be predicted that the same pattern may follow for the next BTC halving. This projection is further strengthened as the awareness of cryptocurrency trading has increased. There will most likely be a sudden decline in the BTC value some months following the halving. This will be followed by an increase in the value of BTC until a steady value is achieved.