By
Mayowa Adebajo
April 24th, 2024
The upcoming block reward halving event for the Bitcoin blockchain network is scheduled to take place in May 2020 and could possibly act a trigger for the Bitcoin price surge.
Currently, we are into the longest bearish phase in the history of the cryptocurrency market. However, the crypto trader community remains bullish of the arrival of Bitcoin Block Reward Halving event by May 2020. Halving is a pre-configured algorithmic event which reduces Bitcoin block rewards by 50 percent.
The Bitcoin block reward halving happens at an interval of every 210,000 blocks, and also every four years. The last Bitcoin halving event took place in 2016, and the next will occur in May 2020. At present, Bitcoin miners receive 12.5 BTC for mining one block and adding it to the Bitcoin network. This reward is to compensate for the electricity and the computational resources invested by the miners, as well as maintaining the security of the network.
The upper limit for Bitcoin (BTC) supply is 21 million. As miners reach close to this limit by adding new blocks, the mining reward becomes half. The ‘halving’ mechanism ensures that Bitcoin doesn’t suffer from intense inflation when distributed. The block reward halving limits the circulating supply of Bitcoin. Thus, if demand for BTC remains same or increase, it can certainly result in northward price movement.
Trader Predictions for the Bitcoin Price Surge
The block reward halving is certainly a positive news for Bitcoin HODLers and investors. However, historical trends suggest that the Bitcoin halving gets priced in nearly one year before its actual schedule. Thus, many traders believe that Bitcoin will bottom out in early 2019 with next rally starting in May 2019. Here’s what crypto trader “Moon Overload” has to say.
https://twitter.com/MoonOverlord/status/1088166671234334722
However, Chainalysis senior economist Kim Grauer raised an important argument saying it’s difficult to say whether the decline in Bitcoin’s circulating supply is already factored in. Grauer said:
“That is a very complex question. On the one hand, direct calculations about market cap do not take lost coins into consideration. Considering how highly speculative this field is, those market cap calculations may make it into economic models of the market that impact spending activity”.
Crypto Market Outlook In the Coming Months
In an exclusive talk with CCN, an anonymous trader dubbed “200M_trader” spoke about his outlook on the crypto market. This trader is well-known for making a whopping $200 million by trading Ethereum, in a single month. 200M_trader notes that it is just a matter of time when “big players” from the global financial space join the crypto bandwagon. He said:
“The market has cycles, and it’s important to remember this during both the rapid growth and the strong downfall. It’s also just a matter of time when the big players will enter this market well and truly. We have this time for now and we need to act.”
He also added that the upcoming Bitcoin block reward halving will provide a positive trigger for the world’s largest cryptocurrency.
“The next Bitcoin block reward halving will serve as an additional trigger for growth; perhaps not as explosive, but still growth. The closer this moment is, the closer is the end of the winter. I would advise you to count down the remaining days before halving, rather than count the number of days the bear market lasts, this figure will encourage optimism every day,” he said.