Bitcoin (BTC) is just over three months away from having its supply cut in half — and major market commentators are unashamedly bullish on its impact.
In a tweet on Feb. 1, rating agency Weiss Ratings presented a summary of Bitcoin price performance over its two previous block reward halvings.
Weiss: Halvings “absolutely” help BTC price
Halving refers to the number of new Bitcoins awarded to miners for each block of transactions they validate.
During the first event in late November 2012, BTC/USD traded at just $12. Four years later, the supply halved to the current rate of 12.5 BTC per block, and the price was $652.
With Bitcoin gaining over 30% in January alone to hit $9,450, expectations are now higher than ever that the May 2020 halving will produce serious price action a lot closer to $12,000 than $12.
“So, does the Bitcoin halving help drive prices higher? Absolutely,” Weiss summarized.
“The only question now is how high will #BTC go this time around?”
Bitcoin block reward halvings and price floors. Source: Weiss Ratings/ Twitter
Bitcoin set to beat gold, Fed inflation
The impact of the 2016 halving was somewhat delayed. In the event, Bitcoin only shot to all-time highs of $20,000 in a bull run which began a year later.
Similarly, some analysts expect a latency period to accompany the May block reward halving to 6.25 BTC.
As Cointelegraph reported, however, other statistics make 2020 an even more conspicuous year for Bitcoin. In terms of inflation, for example, the halving will reduce Bitcoin’s rate to less than that of both gold and the Federal Reserve’s target for the United States economy.
In 2021, according to one historically accurate price model which demonstrates the knock-on effect of Bitcoin supply reductions, BTC/USD should hit a new all-time high of $100,000.
Published at Sat, 01 Feb 2020 11:35:00 +0000