Bitcoin Halving 2020
The much-awaited “Bitcoin halving” is here now. This is the event during which the miners of BTC receive their processing rewards on the network of Bitcoin to divvy up for the 3rd time in recent years. Theoretically, following this halving event, the value of the Bitcoin should rise as it will be difficult to produce new units of this prominent cryptocurrency. This narrative even gained support from the experts back in the first 2 halving events of 2012 and 2016.
Within the first year following the first halving event, the price of Bitcoin rose by 90 times that is from the price of 10 dollars to an astounding peak of 1180 dollars. As for the 2nd halving, the price went as high as about 2800 dollars from about 600 dollars. And following that rising trend, the price inflated up to 20000 dollars in a year back in December of 2017.
As for now, the cryptocurrency market seems to have matured a lot since the previous halving events. One of the reasons is that the Bitcoin derivatives like the options and futures have become much more predominant in recent times. Research head at Blcokchain.com; Garrick Hileman says, “The world of 2020 is quite different compared to the previous halving events as the derivatives market has become much larger and much more important.”
He adds, “One way by which I would say this market saw a dynamic is that in the past, the trading market was the lopsided one towards the rising transactions as there were not many possible ways for speculating on the decrease of the prices. Common examples for it are the ability of borrowing and selling short.
This is something that is now common through things like Options and Futures. All these derivatives have led to the playing field being leveled for the folks who wish to bet on prices going down.”
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On the other hand, there is also massive media coverage as to how the equities are closely in relation to Bitcoin price. As per Demirors like Todaro and Kim, Bitcoin does seem to be tracking the stocks nowadays and this seems to be the larger driving force as compared to the halving event for the short term.
Now based on the 3 Ds; Depletion, Demand, and Dollars; experts believe that the BTC market price is going to materially higher than their current levels in a time of 1 year to 1 and a half years.