Why will BTC halving stimulate price growth?

[Qcrypto]

I hear a lot of discussion around BTC halving that is expected in May 2020.
Many people are confident that this event will trigger the next bull run.

What is the logic behind this?

[lightningmelo]

Every 4 years, the block reward drops in half, which is commonly known as the halving event.

The current block reward is 12.5 BTC being minted roughly every 10 minutes.

After the halving, only 6.25 BTC will be minted every 10 minutes.

This means that there will be fewer coins being sold by the miners.

Supply drops, demand stays the same. Price goes up.

[Qcrypto]

Every 4 years, the block reward drops in half, which is commonly known as the halving event.

The current block reward is 12.5 BTC being minted roughly every 10 minutes.

After the halving, only 6.25 BTC will be minted every 10 minutes.

This means that there will be fewer coins being sold by the miners.

Supply drops, demand stays the same. Price goes up.

How does supply drop?

There is currently 17'947'512 total bitcoin available. Out of those 17'947'512 around 3% is being traded daily. There are still 97% left in supply to be traded. Okay lets say there is still around 80% left due to the fact that lots of bitcoins are lost somewhere never to be found.

So where does this shortage of supply comes?

Why should people suddenly start buying more BTC?

[Lanatsa]

I hear a lot of discussion around BTC halving that is expected in May 2020.
Many people are confident that this event will trigger the next bull run.

What is the logic behind this?

People are presuming on the thing do happened on the last halving of BTC where it did shoot up its price  and they are very positive on it just like on the thing I had able to read up https://www.newsbtc.com/2019/07/14/refreshed-model-bitcoin-btc-to-see-100000-after-2020s-halving/ but I would say we might not able to see the same thing yet no ones able to guarantee on what would happen ahead.

Price will should up on 2 possible reason either on Hype or simply btc do have higher demand.Come to think on halving that it would be cut into half and if the said demand do significantly rise up then expect for its value to rise up.

[lightningmelo]

Every 4 years, the block reward drops in half, which is commonly known as the halving event.

The current block reward is 12.5 BTC being minted roughly every 10 minutes.

After the halving, only 6.25 BTC will be minted every 10 minutes.

This means that there will be fewer coins being sold by the miners.

Supply drops, demand stays the same. Price goes up.

How does supply drop?

There is currently 17'947'512 total bitcoin available. Out of those 17'947'512 around 3% is being traded daily. There are still 97% left in supply to be traded. Okay lets say there is still around 80% left due to the fact that lots of bitcoins are lost somewhere never to be found.

So where does this shortage of supply comes?

Why should people suddenly start buying more BTC?

People don't start buying more BTC, the demand stays the same.

It's the supply side of the equation that changes.

As you pointed out, only a very small percentage of the BTC is being actively traded. Of that small percentage, the mined BTC makes up a significant percentage. When the miners start getting paid half of what they are paid now per block, that's when the supply starts to decrease.

Of course, when this causes the price to spike up, news outlets start talking about Bitcoin, which makes more people buy, rising the price, making more people talk about it, making more people buy... you get the point

[hatshepsut93]

Halvening doesn't trigger a bull run as soon as it happens, it just pushed the price up over long periods of time, because it's a very predictable event, so it's priced in long before it happens. Historically halvenings coincided with bull runs, so people expect it to happen again, but we already had bull run when Bitcoin went from $3,000 to $13,000 this year - I believe this was also caused by the upcoming halvening. So maybe the bull run in next year won't be as huge as some people expect.

[1982dre]

Halvening doesn't trigger a bull run as soon as it happens, it just pushed the price up over long periods of time, because it's a very predictable event, so it's priced in long before it happens. Historically halvenings coincided with bull runs, so people expect it to happen again, but we already had bull run when Bitcoin went from $3,000 to $13,000 this year - I believe this was also caused by the upcoming halvening. So maybe the bull run in next year won't be as huge as some people expect.

Guess your right. A halving have never cause a big bull run. Maybe it gives just a small boost but the normal grow like this year is much better then a sudden grow which mostly follows by a drop

[cr1776]

Every 4 years, the block reward drops in half, which is commonly known as the halving event.

The current block reward is 12.5 BTC being minted roughly every 10 minutes.

After the halving, only 6.25 BTC will be minted every 10 minutes.

This means that there will be fewer coins being sold by the miners.

Supply drops, demand stays the same. Price goes up.

How does supply drop?

There is currently 17'947'512 total bitcoin available. Out of those 17'947'512 around 3% is being traded daily. There are still 97% left in supply to be traded. Okay lets say there is still around 80% left due to the fact that lots of bitcoins are lost somewhere never to be found.

So where does this shortage of supply comes?

Why should people suddenly start buying more BTC?

New supply drops because the number of coins created per block is cut in half, as explained above.

There is no guarantee it will impact price, in fact at the past halvings it hasn't immediately it has been months that it occurred because people have anticipated it.  If miners are selling many of their newly mined coins to cover costs and the number of new coins available on the market immediately drops by halve while new demand for coins remains the same, something will change in order to reach equilibrium of supply and demand.  Often that is price: half the number of new coins, unchanged demand for bitcoin means price increases.

Your static analysis ignores the fact that someone is purchasing the new supply and the number of coins available does not remain 17,947,512 but increases every block.

[Artemis3]

I hear a lot of discussion around BTC halving that is expected in May 2020.
Many people are confident that this event will trigger the next bull run.

What is the logic behind this?

The logic is, less availability of bitcoin, of course. Good 'ol Supply and Demand.

Of course, just because there will be half production of bitcoins, doesn't necessarily means the market will suddenly value bitcoin twice as much. For starters, there is the already mined bitcoin in circulation... (about 18 million of 21).

As you can see, every time this occurs, price should rise less and less. Of course deviation based on human behavior occurs, but things will find its natural course.

The bitcoin price is logarithmic, it should be reducing its price increase with time. It will never reach absolute stability, because fiat money is devalued intentionally, so after a century its price should be going in proportion to the fiat losing value, ie. 2% yearly. That would be the top right most part of the price chart for bitcoin's price lifetime.

In short: Expect it to go up, but each time less than before.

[roosbit]

Based on the simple rules of supply and demand it's a definite yes!

With the growing demand for crypto it implies we shall have less cryptos in circulation while demand is there which means price is what's affected in this equation.

[ralle14]

How does supply drop?

There is currently 17'947'512 total bitcoin available. Out of those 17'947'512 around 3% is being traded daily. There are still 97% left in supply to be traded. Okay lets say there is still around 80% left due to the fact that lots of bitcoins are lost somewhere never to be found.

So where does this shortage of supply comes?

Why should people suddenly start buying more BTC?

Even though there's a lot of bitcoins available to be traded, out of the 80% we don't know when they'll be put in to the exchanges again since we know a lot of people will always be holding their bitcoins and this would increase even more knowing that the halving is less than a year. I don't think there would be a bull run but the price should improve after the halving.

[Cointikka]

Bitcoin Halving is bad for miners as the block reward drops in half but, good for HODLers.

The first halving happened in 2012 at that time the price of 1 BTC was $12.22. The second halving happened in 2016 and price of 1 BTC was $657.61.
The third halving is due to happen in 2020 and looking at the past trend you can expect the price of 1 BTC to go beyond the all time high.

[imstillthebest]

Halvening doesn't trigger a bull run as soon as it happens, it just pushed the price up over long periods of time

Guess your right. A halving have never cause a big bull run. Maybe it gives just a small boost

dont trigger a bull run but pushing/boosting the price ? i think those are still the same  . i think you guys are saying that btc halving still stimulate price growth  .

 @op , thanks for opening a question like this because this was actually pop on my mind  .

im also curios why people can say that halving can up the price of btc   . does halving happened before ?  maybe the price also pumped before so now they are thinking that history repeats itself  .

[rodel caling]

I hear a lot of discussion around BTC halving that is expected in May 2020.
Many people are confident that this event will trigger the next bull run.

What is the logic behind this?

People in this community not tired to wait the rest ght time of the bitcoin bull run before people expect if bitcoin reach the 15,000$ during the bitcoin price is reaching 13,000$ last few bitcoin possible to get another bull run.
We need to to be strong and extend patience when will the right time for us to get high profits if bitcoin come again for another bullrun.

[jossiel]

With all of those explanation, if it's clear to you on how halving affects the supply and demand of bitcoin. Look also to this pattern which I quote below.

The first halving happened in 2012 at that time the price of 1 BTC was $12.22. The second halving happened in 2016 and price of 1 BTC was $657.61.
The third halving is due to happen in 2020 and looking at the past trend you can expect the price of 1 BTC to go beyond the all time high.

See also this chart.
Source: https://www.reddit.com/r/Bitcoin/comments/97zsmt/infographics_on_bitcoin_halving_relative_to_price/

[bob123]

It may or may not trigger a bull run.

The reward will drop by 50%. If the demand stays the same, the decreased supply could thrive the price upwards.
Of course this doesn't has to be the case. And chances are high that if everyone is expecting it to happen.. it won't happen.

The supply will become more limited because of the slower blocks

The supply will decrease because the block reward decreases from 12.5 to 6.25 BTC.
This does not influence the 'speed' of the blocks (i guess you mean the time it takes to mine a new block ?)

im also curios why people can say that halving can up the price of btc   . does halving happened before ?

Yes, this happens every ~4 years.

1st halving: Reward dropped from 50 BTC to 25 BTC (November 2012)
2nd halving: Reward dropped from 25 BTC to 12.5 BTC (July 2016)
3rd halving: Reward will drop from 12.5 to 6.25 BTC (somewhere mid 2020)

[romero121]

This is completely a demand and supply game. More the demand to the decrease in supply every four year will cause the demand high even if the user community hasn't increased as the supply has decreased. This is how the market is expected to grow by the time of halving. It happens close to the days of halving or after the days of halving.

This doesn't assure with a big increase in price, but there'll be good increase to some extent. This has happened till the past halving, and the same creates a big expectation among the entire userbase.

[tanjiran]

As we know that Halving Day makes the amount of bitcoin mined per block reduced by half, this routine cycle automatically makes bitcoin more difficult to mine. If demand is higher, meaning prices will also be higher. Moreover, cryptocurrency users are increasing at this time. If coupled with FOMO the results will be even more surprising. Even though it is unpredictable, we must not miss this opportunity.

[fiulpro]

As everyone already explained since the supply will drop because of the limited amount of bitcoins the price will increase gradually ... And this event is going to happen soon therefore people expect a bull run also at the same time you should look at the price chart , it has been constant for a few weeks now ..  it is not getting considerably lower and nor doing anything .. generally it happens when it is suddenly gonna spurt up.

[Herbert2020]

As everyone already explained since the supply will drop because of the limited amount of bitcoins the price will increase gradually

then everyone is wrong, or maybe you misunderstood what they were saying.
supply doesn't drop, in fact it is the exact opposite meaning supply is always increasing as new coins are being created by new blocks and come into circulation.
the only thing that drops (by 50% or half) is the speed of that creation meaning if it is X bitcoin per day now, it will be X/2 after the halving (12.5BTC/block -> 6.25 BTC/block or 1800BTC/day -> 900BTC/day).

and finally the reason for price rise is that adoption (demand) is increasing day by day so if you imagine two vectors opposite of each other:
supply ----> <---- demand
after halving supply vector is weaker so demand pushes back to reach equilibrium, that is why price rises
supply --> <---- demand