Is the halving a catalyst for a Bitcoin price bubble?

[wajik-tempe]

The common view is that with each halving the mining reward decreases. This should reduce the average volume dumped by miners on the markets which cause a constant dump in the value and prevent bulls from catching up. However this statement also takes it for granted that miners are dumping which may not be correct in all cases. They have dumped coins when prices were pretty low - a desperate attempt to cover their ROI and continue mining.

But with the current price even miners would want to save up on selling. Again the opposite could also be true because hte price is high it is a good time to sell for those miners who have been storing coins since 2010, if any exist.

Its more correct to think this as a placebo effect. People think the price will go up and thus buy. So the price goes up because of this buying and not halving directly.

Yeah i'm aggree the people are attached to placebo effects and the price is must be rise because of the people demand. I think the real value of the coins is impossible to measure because the bitcoin's price is always be determined by people demand even if it can be said bitcoin has no function in their lives, but if it's demand still high the price will be high.

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[acdc]

This may be the rule of the market, sharks want to lower the price of Bitcoin after hugging a large amount of them they start pushing the price up. A lot of investors have fallen into FOMO, I think no more than 2021 Bitcoin price will explode yet again.

[jamesndungu1]

Bitcoin is at its infancy stage, which means that there is still room for improvement which I am currently eager to see. At its early stages, Bitcoin holds only a tiny fraction of the markets it stands to disrupt, which reaches into trillions of dollars. If Bitcoin becomes massively adopted due to its growing popularity, then investing in it will have been the best decision of my trading venture. Halving is one of the reasons why i believe bitcoin will bring because of the scarcity and the number of bitcoins minted everyday will decrease.

[jostorres]

Analytically, I have still not been able to relate the halving of bitcoin to its price surge because it seem that there is no much correlation as the halving is actually meant to be a rewarding system for the miners, but the reason why there will be a slight improvement on the value of bitcoin during the halving is simply because many people have already developed that mentality because of the past experience as we have seen that halving literally affect the value of bitcoin positively.

But from my own understanding, I think the only thing I could relate to that is that many people tend to start investing in bitcoin because of this believe and thereby causing the demand for bitcoin and as the demand increases, so as the value of bitcoin will also increase too.

[aardvark15]

Analytically, I have still not been able to relate the halving of bitcoin to its price surge because it seem that there is no much correlation as the halving is actually meant to be a rewarding system for the miners, but the reason why there will be a slight improvement on the value of bitcoin during the halving is simply because many people have already developed that mentality because of the past experience as we have seen that halving literally affect the value of bitcoin positively.

But from my own understanding, I think the only thing I could relate to that is that many people tend to start investing in bitcoin because of this believe and thereby causing the demand for bitcoin and as the demand increases, so as the value of bitcoin will also increase too.

The halving makes the block reward smaller for miners which means that they earn fewer Bitcoins for mining. Therefore there are fewer Bitcoins being mined which increases scarcity. I think this is what will drive the price up.

[pawanjain]

My question “Is the halving a catalyst for a Bitcoin price bubble?” is based on my observation that the halving happens every 4 years and a Bitcoin price bubble seems to also happen every 4 years.

Halving of 2016: 7/9/16
Price bubble was around mid Dec 2017 (about 17 months after halving)

Halving of 2012: 11/28/12
Price bubble was around late Nov 2013 (about 12 months after halving)

Any correlation? Is it possible that the halving starts a price increase that grows exponentially over the course of a year to a year and a half until the bubble pops?  If so, should we expect the same thing to happen after the halving of 2020?

Please share your thoughts

Let me put forth a few more questions so that you get even more confused.

As per bitcoin's history, we can notice that whenever bitcoin halving occurs the price of bitcoin spikes up followed by a dump.
Don't you think that if people already know that the price will spike up then they will be ready to grab this opportunity and would have already bought their bitcoins in advance and will definitely be read to sell to cover up their losses from the previous bubble pop.

[Reid]

Good analysis.

I never  went that far ahead into looking at the history of halving for a year or beyond it.
I just looked at months after it.

I guess you might be right. But, there could be changes.
The number of people trying to buy bitcoin is growing, it may be slow but it is still growing.
So if the my calculation will be right it could be earlier this year.
The price pump might happen soon even before the halving happens.
The hype is too much now and the social media announcements are at large.
It may not be the same thing as what happened the last 8 years.

[barabarian1]

I agree with you OP. i think bitcoin has the same pattern i'm also sure after bitcoin halves in 2020 then 1 or 1.5 years later bitcoin will be bullish and can reach a new ATH. in 2017 the highest price of bitcoin is $ 20,000, maybe in 2021 the price of bitcoin can reach $ 50,000. all bitcoin holders certainly hope this will happen. we just need to be patient and wait.

[ecnalubma]

Its a lot of maybe’s, we really can’t guarantee the future  results will behave like from the past. I don’t really get to excited about the upcoming events rather I tend to be more cautious. If the price will bubble again and reach 20k level then expect a dump from people who bought at ATH.

[piebeyb]

My question “Is the halving a catalyst for a Bitcoin price bubble?” is based on my observation that the halving happens every 4 years and a Bitcoin price bubble seems to also happen every 4 years.

Halving of 2016: 7/9/16
Price bubble was around mid Dec 2017 (about 17 months after halving)

Halving of 2012: 11/28/12
Price bubble was around late Nov 2013 (about 12 months after halving)

Any correlation? Is it possible that the halving starts a price increase that grows exponentially over the course of a year to a year and a half until the bubble pops?  If so, should we expect the same thing to happen after the halving of 2020?

Please share your thoughts

this is exactly what i said and analyzed here, the incident has happened a second time, we all think and hope it will happen for the third time, since 2014 the price of bitcoin is destroyed i have no hope and will not believe that it will again grow, it turns out what I'm afraid all of that happened again bubbles came in 2017, like dejavu
sorry I repeat the words below

2012 - Bitcoin halving
2013 - go to the moon
2014 - hacking problem from MTGOX and others
2015 - Bitcoin prices wake up from the downturn
2016 - Bitcoin halving
2017 - go to the moon
2018 - the bitcoin problem is usually about HACK
2019 - Bitcoin prices wake up from the downturn
2020 - Bitcoin halving
2021 - try asking your grandma?

[mu_enrico]

If you guys want to go deep for this discussion, I would recommend stock-to-flow thread by fillippone. You can also read my comment about:
- construct formulation;
- sampling;
- model fit;
- forecasting.

Basically, I know that historically, halvings were the catalyst for positive price movements. However, the proofs aren't sufficient enough to say that the next halvings will be the same. That's because some of the dynamics (or assumptions) continually change in the real world.

[el kaka22]

Could it be? Sure. Will it be? We don't know.
The reality is most of the time people knows whats going to happen and shape their positions accordingly way before something happens but when that thing happens depending on what happens things change.

For example, everyone knew about the BAKKT and price changed accordingly way before but when BAKKT happened itself people realized its not as high as they expected so the price fell a lot.

Now, we do have the halving but that doesn't mean what people think will happen gonna happen for sure, maybe people will be disappointed by what happens and they won't buy and the price will fall, maybe exactly what they expect will happen and the price will go up. Without halving happens and people react we will never know what will happen.

[senne]

My question “Is the halving a catalyst for a Bitcoin price bubble?” is based on my observation that the halving happens every 4 years and a Bitcoin price bubble seems to also happen every 4 years.

Halving of 2016: 7/9/16
Price bubble was around mid Dec 2017 (about 17 months after halving)

Halving of 2012: 11/28/12
Price bubble was around late Nov 2013 (about 12 months after halving)

Any correlation? Is it possible that the halving starts a price increase that grows exponentially over the course of a year to a year and a half until the bubble pops?  If so, should we expect the same thing to happen after the halving of 2020?

Please share your thoughts

That is such a vague interpretation of a correlation between halving and the price rise. What I have noticed is that the price doesn't get affected much because of the halving. Moreover, if you look at the past trend, bitcoin wasn't that popular or known enough when last halving took place. The popularity and following took pace in 2017 and 2020 halving will be the first after that.
Bitcoin has gone mainstream meanwhile and now the effect of halving will be vastly different from the last halvings we had.

[Febo]

Is the halving a catalyst for a Bitcoin price bubble?

Imagine mining reward as a cost to run Bitcoin. When cost halve then yes value of Bitcoin is to increase. It is simple as that.  

[exstasie]

I have to think there is indeed some kind of correlation, even tho I think that an event as predictable as a halving *should* be incorporated into the price well before it happens, but I just don't know if that's the case.  I thought the same thing last time and the price rose afterward.

The idea that events can be "priced in" at all is a fallacy. Markets aren't that predictable.

Price kept rising post-halving because of supply and demand. That's an annoying answer I know, but let's just say supply and demand is a lot more complex than halvings. A halving is just one variable in an endless sea of variables that determine the price.

[magneto]

I have to think there is indeed some kind of correlation, even tho I think that an event as predictable as a halving *should* be incorporated into the price well before it happens, but I just don't know if that's the case.  I thought the same thing last time and the price rose afterward.

The idea that events can be "priced in" at all is a fallacy. Markets aren't that predictable.

Price kept rising post-halving because of supply and demand. That's an annoying answer I know, but let's just say supply and demand is a lot more complex than halvings. A halving is just one variable in an endless sea of variables that determine the price.

Absolutely agreed.

If markets were completely rational then every event should be priced in - and there would be no short term volatility whatsoever due to foreseeable events.

I expect the halving next year to have a similar psychological effect on investors as it did 2017, albeit on a much smaller scale. We are unlikely to see 4 digit percentage levels of growth again due to the expansion in market cap, but psychologically, there is still significance.

[Oceat]

My question “Is the halving a catalyst for a Bitcoin price bubble?” is based on my observation that the halving happens every 4 years and a Bitcoin price bubble seems to also happen every 4 years.

Halving of 2016: 7/9/16
Price bubble was around mid Dec 2017 (about 17 months after halving)

Halving of 2012: 11/28/12
Price bubble was around late Nov 2013 (about 12 months after halving)

Any correlation? Is it possible that the halving starts a price increase that grows exponentially over the course of a year to a year and a half until the bubble pops?  If so, should we expect the same thing to happen after the halving of 2020?

Please share your thoughts

this is exactly what i said and analyzed here, the incident has happened a second time, we all think and hope it will happen for the third time, since 2014 the price of bitcoin is destroyed i have no hope and will not believe that it will again grow, it turns out what I'm afraid all of that happened again bubbles came in 2017, like dejavu
sorry I repeat the words below

2012 - Bitcoin halving
2013 - go to the moon
2014 - hacking problem from MTGOX and others
2015 - Bitcoin prices wake up from the downturn
2016 - Bitcoin halving
2017 - go to the moon
2018 - the bitcoin problem is usually about HACK
2019 - Bitcoin prices wake up from the downturn
2020 - Bitcoin halving
2021 - try asking your grandma?

As expected Bitcoin halving will take more time before it could start to fuel the fire for the next bull run. So this just means that this year and the next year will have a reasonable price for investors to sell if there is an increase. Bitcoin halving is just beyond to our expectations already since it will not going to make a change in the market yet in 2020.

[alexsandria]

Comparing on when prices starts to pump after halving. We could afford to say that we might wait a year after the halving though as prices or the demand itself starts to allocate. Though we aren't sure that it is particularly the main reason of bull run but because it did happenend in two consecutive halving then maybe it really is.

[TheUltraElite]

If the price will bubble again and reach 20k level then expect a dump from people who bought at ATH.

If you are hoping to see another 20k rise then stock up on bitcoin at this stage to be ready to sell at that level. But doubts are there about such rise because in 2017 there were a number of reasons why the market rose like that, the BTC forking, the tether manipulation which fueled the price to rise a lot.

These things are not happening twice so probability of a huge pump is low.

Imagine mining reward as a cost to run Bitcoin. When cost halve then yes value of Bitcoin is to increase. It is simple as that. 

Things dont always go as per the dictum. What about the miners who are more interested in the slow selling of bitcoins to balance their ROI and keep a bigger stash in lockup for future selling?

[piebeyb]

My question “Is the halving a catalyst for a Bitcoin price bubble?” is based on my observation that the halving happens every 4 years and a Bitcoin price bubble seems to also happen every 4 years.

Halving of 2016: 7/9/16
Price bubble was around mid Dec 2017 (about 17 months after halving)

Halving of 2012: 11/28/12
Price bubble was around late Nov 2013 (about 12 months after halving)

Any correlation? Is it possible that the halving starts a price increase that grows exponentially over the course of a year to a year and a half until the bubble pops?  If so, should we expect the same thing to happen after the halving of 2020?

Please share your thoughts

this is exactly what i said and analyzed here, the incident has happened a second time, we all think and hope it will happen for the third time, since 2014 the price of bitcoin is destroyed i have no hope and will not believe that it will again grow, it turns out what I'm afraid all of that happened again bubbles came in 2017, like dejavu
sorry I repeat the words below

2012 - Bitcoin halving
2013 - go to the moon
2014 - hacking problem from MTGOX and others
2015 - Bitcoin prices wake up from the downturn
2016 - Bitcoin halving
2017 - go to the moon
2018 - the bitcoin problem is usually about HACK
2019 - Bitcoin prices wake up from the downturn
2020 - Bitcoin halving
2021 - try asking your grandma?

As expected Bitcoin halving will take more time before it could start to fuel the fire for the next bull run. So this just means that this year and the next year will have a reasonable price for investors to sell if there is an increase. Bitcoin halving is just beyond to our expectations already since it will not going to make a change in the market yet in 2020.

no need to worry about saturating prices right now, ATH will happen so fast that it will make many people see and be surprised, bitcoin halving happens in the near future around 2020 and it is a time where everyone waits for the historical moment to be repeated, the next bull will come soon