Why Bitcoin halving 2020 is different and can disappoint in expectations of price escalation as in 2012 and 2016
2 min readIn less than a month, Bitcoin’s third halving, probably the most anticipated event in the crypto world, will take place. After halving, the remuneration received by miners for verifying transactions and maintaining the bitcoin network will be halved. Theoretically, the price of bitcoins should increase after rewards have decreased, which means that bitcoins will be even more scarce.
Predictions of how the market will respond to halving vary among cryptanalysts. Some, like the crypto commentator PlanB, believe that the market has already adequately appreciated the reward effect. Another group, including bitcoin enthusiast Anthony Pompliano and CEO of Binance Changpeng Zhao, insists that the BTC has yet to count towards halving.
Bitcoin experienced two halvings in his short life – November 28, 2012, when the rewards dropped from 50 to 25 BTC per block, and on July 9, 2016, they dropped to 12.5 BTC. Approaching halving will see another drop to 6.25 BTC per block.
Halving 2012
Prior to halving in 2012, Bitcoin showed a decent upward trend. Since the beginning of the year, it has increased by about 135% from just $ 5 per BTC to $ 12 until early November 2012. After halving, the trend continued until the end of 2013 and BTC rose sharply to approximately $ 1180
Halving 2016
BTC prices rose from $ 300 to more than $ 600 from October 2015 until July 2016. Only one year after halving, during July 2017, the BTC’s price rose sharply to around $ 2,800, reaching ATH nearly $ 20,000 in December 2017.
The 2017 Bull Run matched the ICO bubble that appeared that year. The importance of the ICO boom was such that it increased the demand for BTC, which, along with Ethereum, was a cryptocurrency that many ICOs accepted.
In 2017, the SegWit bitcoin protocol update was also implemented. This increased the processing power of bitcoin transactions. Analysts said the network improvement was also a contributing factor to the BTC star year. Increased media attention was another factor that contributed to the most significant crypto bubbles of 2017.
Question mark before halving in 2020
Unlike previous halvings, Bitcoin is not so strong nor bullish. About three weeks to go and it’s hard to believe that things will change in this short period.
In addition, the bitcoin market is now more mature. Since the last halving, a number of tradable products, such as Bitcoin derivatives, have entered the market. Traders can now bet for or against BTC (long and short). More institutional players are also introducing crypto products more than ever before.
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