Does halving really create deflation?

[andycarrol]

but so far the movements are almost similar to the two previous halving cases, some of which seem to have declined before halving, news of the hack that just happened.
I didn't expect it to make a new ATH, but at least it could again touch $20k, that's really good.

You should be careful before making such assumptions, because this time the prices have already increased a lot, in part due to the hype surrounding the block reward halving. And another thing is that the investors may be a bit reluctant, after the 85% decline we had in 2018. Many of those who purchased Bitcoin at ATH prices are still stuck with their investment and they are looking for a way out. If the prices reach 10K or 12K again, then we may see a lot of sell-off from this group.

but that's a fact that you can see it, has it increased even more now? I think this is just recovery because if there is no recovery it can go down even further, and in my opinion, there is no hype from halving for now, but it will start next year. The majority of those who should buy at ATH should have sold above $10k because mid-2019 the price had risen to $13k.

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[Clement Kaliyar]

but that's a fact that you can see it, has it increased even more now? I think this is just recovery because if there is no recovery it can go down even further, and in my opinion, there is no hype from halving for now, but it will start next year. The majority of those who should buy at ATH should have sold above $10k because mid-2019 the price had risen to $13k.

If you look at the past market situation the hype does not start after the halving and when the market steadies themselves you will see that the market starts to go higher and that is what we are expecting to happen this time around, the regulation is a major topic and it all depends upon how these major nations are trying to regulate the market and we can expect them to come up with regulation in the next year.

[CarnagexD]

but that's a fact that you can see it, has it increased even more now? I think this is just recovery because if there is no recovery it can go down even further, and in my opinion, there is no hype from halving for now, but it will start next year. The majority of those who should buy at ATH should have sold above $10k because mid-2019 the price had risen to $13k.

If you look at the past market situation the hype does not start after the halving and when the market steadies themselves you will see that the market starts to go higher and that is what we are expecting to happen this time around, the regulation is a major topic and it all depends upon how these major nations are trying to regulate the market and we can expect them to come up with regulation in the next year.

Next year will be the start of various cryptocurrency regulation. But what do we expect from it, a quite stable market or a more volatile one? Surely people who will first engage with cryptocurrency next year will be excited and hype about it, A big factor to predict what to happen next. I agree, the previous halving provides a significant price increase no matter what the market situation is. But then again it is still unknown for us, it is called just an expectation,anything and everything could happen here in any direction at any causes. So let us just wait for it to come.

[palle11]

but that's a fact that you can see it, has it increased even more now? I think this is just recovery because if there is no recovery it can go down even further, and in my opinion, there is no hype from halving for now, but it will start next year. The majority of those who should buy at ATH should have sold above $10k because mid-2019 the price had risen to $13k.

If you look at the past market situation the hype does not start after the halving and when the market steadies themselves you will see that the market starts to go higher and that is what we are expecting to happen this time around, the regulation is a major topic and it all depends upon how these major nations are trying to regulate the market and we can expect them to come up with regulation in the next year.

Are you talking about full time regulation to the usage and transfer of bitcoin? Or regulation of maybe exchanges.
On the latter, I hardly see that happening with bitcoin or maybe not in the near future.

Anyway, as for devaluation that op asked. bitcoin is not fiat and I don't think is going to have a direct impact on the fiat.

[Karmakid]

but that's a fact that you can see it, has it increased even more now? I think this is just recovery because if there is no recovery it can go down even further, and in my opinion, there is no hype from halving for now, but it will start next year. The majority of those who should buy at ATH should have sold above $10k because mid-2019 the price had risen to $13k.

If you look at the past market situation the hype does not start after the halving and when the market steadies themselves you will see that the market starts to go higher and that is what we are expecting to happen this time around, the regulation is a major topic and it all depends upon how these major nations are trying to regulate the market and we can expect them to come up with regulation in the next year.

Next year will be the start of various cryptocurrency regulation. But what do we expect from it, a quite stable market or a more volatile one? Surely people who will first engage with cryptocurrency next year will be excited and hype about it, A big factor to predict what to happen next. I agree, the previous halving provides a significant price increase no matter what the market situation is. But then again it is still unknown for us, it is called just an expectation,anything and everything could happen here in any direction at any causes. So let us just wait for it to come.

The effect of the next halving would probably be the same like the previous one. People witnessed the effect of last halving to the price of bitcoin and just like what happened in litecoin, the price increases because the people are so hyped up about the halving and it would be the same to bitcoin, people are now into bitcoin because all they want is fast money. Greediness will become the fuel for bitcoin to spike up and have a parabolic move again.

[Kevondo]

Make your salary as an example.
This year you are gaining $100 then next year you are just gaining $50 for every payroll.
You will ask yourself why?
Is our economy getting better or is it just that the prices of necessities is getting cheaper.
It could be the same.

Now, the halving is coming and miners will have problems also with economy. They are paying electric bills in high amounts while the ROI is not being  reached.
Same as your salary. It needs to be proportioned with how much you will receive.

Indeed the halving will decrease the rewards of miners by half but still they are making some huge earnings. Do not consider miners as some common people who cannot afford electricity bills. They are actually the real whales. After one successful mining, a miner gets almost 12 bitcoin at present. Even if we half this amount, 6 bitcoin is not a small amount at all. Miners can also manipulate market.

[EdvinZ]

If people used only bitcoins to pay for goods and services and halving was expected ahead, it would definitely create deflation. That is, people would not buy goods in the hope of growing their bitcoins. But since Bitcoin is now an investment asset, and in everyday life people pay with Fiat currencies, Bitcoin does not create deflation.

[piebeyb]

hey guys, i'm quite serious on this topic because of the confusing people when talking about Bitcoin "deflation". As far as I understand, the deflation is that goods are cheaper than they are on time or because there is no need to buy goods or the supply of money gets lower.
So for Bitcoin, why is there a deflation? Although I know that miners will find it harder to mine bitcoins after every Halving event, the value of our goods stays the same and is based on fiat money. Bitcoin's price is still being manipulated and it is not necessarily a strong growth after halving. or the best example is Litecoin. after halving, its price is halved instead of rising higher.
So, the question is, does the Halving event actually cause deflation, or is it just some bullshit theory?
Ps: I highly appreciate the comments with sincere contributions. Thanks

when bitcoin halving, bitcoin miner income will decrease, for example, miners a month get 1000 BTC every month, but if bitcoin halving certainly revenue from mining will be reduced by half for example a month to 500 BTC, if the price goes down the miner will feel loss because the value is cheap and while the buyer demand bitcoin is very high, most other investors are HODL, so what do you think if the value is low, does that make sense? soon 2020

[daarul50]

If people used only bitcoins to pay for goods and services and halving was expected ahead, it would definitely create deflation. That is, people would not buy goods in the hope of growing their bitcoins. But since Bitcoin is now an investment asset, and in everyday life people pay with Fiat currencies, Bitcoin does not create deflation.

let's take a look first at what exactly the definition of deflation itself before making any statement.

"Deflation is a general decline in prices for goods and services, typically associated with a contraction in the supply of money and credit in the economy. During deflation, the purchasing power of currency rises over time"
via investopedia

"deflation is a decrease in the general price level of goods and services. Deflation occurs when the inflation rate falls below 0% (a negative inflation rate). Inflation reduces the value of currency over time, but deflation increases it."
via wikipedia

which means in this case that bitcoin price become cheaper -the bitcoin purchasing power become weak and low- despite the halving day in the next few months that expected to make bitcoin even more expensive.
deflation usually about fiat money but here we are in different dimension where bitcoin itself considered as a digital money -some people believe bitcoin itself is free fro inflation with its unique valuation- , but with op questioning about the deflation it just makes me even more confused lol.

i mean here bitcoin for now still debatable wether it is considered as a money or an asset, if you agree to consider bitcoin as money then it has deflation but if you agree bitcoin is an asset then at this point it should not has a deflation just like any other asset.
confused?
yes me too.

[ampu]

The deflation really makes sense as miners continue to mine bitcoin and bitcoin continues to increase in value. If one day bitcoin is no longer mined and the value of bitcoin drops, then Bitcoin is nothing more. The real value of deflation must come from demand. Litecoin is an example, the amount of hashrate has decreased since the last deflation. The value of Litecoin has dropped. Not always deflation increases the value of that asset.

[Xxmodded]

hey guys, i'm quite serious on this topic because of the confusing people when talking about Bitcoin "deflation". As far as I understand, the deflation is that goods are cheaper than they are on time or because there is no need to buy goods or the supply of money gets lower.
So for Bitcoin, why is there a deflation? Although I know that miners will find it harder to mine bitcoins after every Halving event, the value of our goods stays the same and is based on fiat money. Bitcoin's price is still being manipulated and it is not necessarily a strong growth after halving. or the best example is Litecoin. after halving, its price is halved instead of rising higher.
So, the question is, does the Halving event actually cause deflation, or is it just some bullshit theory?
Ps: I highly appreciate the comments with sincere contributions. Thanks

Few months later for bitcoin halving but still not looks good for bitcoin and altcoin have higher price, will be next bitcoin halving can't make bitcoin and altcoin back to higher price again? we are excited waiting bitcoin halving but looks with bitcoin and altcoin price still down, maybe after reached one months later for bitcoin halving give higher price impact for bitcoin and altcoin.

[blckhawk]

First of all, Bitcoin is naturally a deflationary currency since the start. Given the fact that it has limited supply, time would come that when supply is maxed out and demand keeps increasing, its value would increase, and with higher price, makes its purchasing power higher (opposite of inflation imposed by government on fiat by producing more money/supply).

Now for the halving, slower supply generation with assumption of steady Bitcoin demand, would short the supply and create the same effect (deflation). That's why halving is associated with uptrend of prices. Also to mention that the sudden half supply generation is quite a large percentage in one blow (50%).

[rose9696]

No, I don't think halving can cause deflation. I also see most people talk about deflation of bitcoin every 4 years but I feel this is not true. Bitcoin's price has not grown with every halving event and it is constantly fluctuating. maybe it returned $ 3k. so this may be a false conclusion and the halving event only creates supply scarcity and only makes the price of bitcoin increase, done.

[JeffBrad12]

Few months later for bitcoin halving but still not looks good for bitcoin and altcoin have higher price, will be next bitcoin halving can't make bitcoin and altcoin back to higher price again? we are excited waiting bitcoin halving but looks with bitcoin and altcoin price still down, maybe after reached one months later for bitcoin halving give higher price impact for bitcoin and altcoin.

Halving is just the reducing of block reward and nothing more, there's no guarantee that the price will go up after halving and all these people saying that the halving will significantly increase the price is just a speculation. Last year it doesn't give significant change to the price of bitcoin and even unique the price has pumped far before halving and when halving just occured the price already back to normal. people are just too optimistic in this matter I guess.

[Darooghe]

In my opinion the definition of inflation with respect to a particular currency is that it will buy fewer goods and services over time. Deflation is the reverse. so you will be able to buy more in the future. there's no way to say that a particular currency is deflationary by definition, it all depends on what people will sell you for a particular unit. but the idea that BTC is deflationary because the supply of bitcoin is limited and there will only ever be 21 million bitcoins in existence. It has nothing to do with halvening event.

[Barbut]

In a way this is a trick question, we all know there will be just 21 million Bitcoin, what people don't understand about Bitcoin is part where it can have more decimals. If miners agree on that one day, they can do that. Theoretically, Bitcoin can be modified, modification can lead to inflation or deflation, or to be made to be suitable for mass usage. All that depends on miner's decisions, and all others who help the network somehow, cause before everything that's decentralized network, all of them need to agree before they do anything.

[Sadlife]

In the later years it has been that way when it's the time of halving the mining rewards gets reduce and Bitcoin's price starts to sky rocket probably because investors where reminded how limited the supply of bitcoins every halving we see a pump in the price.
Now this years halving serve as to delay the generation of bitcoin with its 2million plus supply left in circulation. Its just new to see that current btc halving doesn't have any big move either to the upside or the downside.

[veleten]

in short - halving is the main mechanism to create deflation , yes
in bitcoin ecosystem this event has very big impact on both the hashrate and the price of bitcoin
and usually , the price is not peaking before or during the halving , but its increasing eventually a couple of months afterwards
the not efficient and smaller miners will have to stop their miners and cease operations , thus cutting the flood of the coins to the market
since they have to sell fast , unlike big companies who could wait for the price they need
while this , in theory , leads to more centralization of the mining , it serves its purpose of the deflatory mechanism perfectly

[uray]

The effect of the next halving would probably be the same like the previous one. People witnessed the effect of last halving to the price of bitcoin and just like what happened in litecoin, the price increases because the people are so hyped up about the halving and it would be the same to bitcoin, people are now into bitcoin because all they want is fast money. Greediness will become the fuel for bitcoin to spike up and have a parabolic move again.

The litecoin halving happened recently and nothing happened as of yet and i am not expecting the price of litecoin to rally alone and people who are investing in any market is not looking for the novelty of the market and all they expect is to earn the profits through smart decisions and if people see the bitcoin market as the fastest way to earn profit then who can complaint that .

[tenakha]

So, the question is, does the Halving event actually cause deflation, or is it just some bullshit theory?

Nothing to be overrated, each theory is bullshit unless we consider it as a major innovation. Such news appeal to the community and when we see it as a high grade innovation, we buy and price rises. Halving is also an innovation like this, and when that happens, it will be more difficult to mine BTC, and looks that will be enough for market to be affected.