How Will the Third Block Reward Halving Affect Bitcoin?

[JH-BTC]

An overview of the theories related to block reward reductions and previous halving events to provide clues on the possible scenarios for BTC-USD after May 2020.

Read more here: https://medium.com/interdax/how-will-the-third-block-reward-halving-affect-bitcoin-ddb38b46a959

[avikz]

It's a nicely written article. Especially the 2nd narrative given in the article, is what the actual scenario will be! Understand a simple math of demand supply. If the demand of an asset remains constant and supply decreases, the price of that asset will increase. That's a very basic lesson of economics that we all read in school.

So as per the theory, the block reward will cut in half but the demand in the market is still robust, or even increasing day by day! So the price is supposed to be increased! I believe the current surge in price has already factored in the upcoming halving event and should continue in the same path! Let's hope for the best!

[davis196]

It's a nicely written article. Especially the 2nd narrative given in the article, is what the actual scenario will be! Understand a simple math of demand supply. If the demand of an asset remains constant and supply decreases, the price of that asset will increase. That's a very basic lesson of economics that we all read in school.

So as per the theory, the block reward will cut in half but the demand in the market is still robust, or even increasing day by day! So the price is supposed to be increased! I believe the current surge in price has already factored in the upcoming halving event and should continue in the same path! Let's hope for the best!

The global market supply of bitcoins isn't determined by the block rewards and BTC mining.
It's determined by how many people HODL bitcoins for the long term instead of selling their BTC.
I believe that 2/3 of the bitcoin users are HODLing bitcoin,this reduces the bitcoin supply and keeps the price high.

[joinfree]

We are likely going to see history repeats itself where we see a rise in the price of bitcoin. This comes about because block rewards are cut into half again to 6.25 now and this will cut down the daily supply of bitcoin that are released into the system. Demand on bitcoin is increasing as some countries and online platforms have started accepting bitcoin as a payment yet we are rather going to have a reduction in the number of bitcoins releases. This is a natural phenomena which brings about the increase in price of any asset or commodity.

[Wexnident]

It was nicely written, and with it starting to clarify thàt the article only contains theories is quite nice. The idea of less supply means higher price is an idea I support cleàrly because that's how the market works, or at least most of them. A follow up repeat of the past records seem to be quite true, or at least, thats how the graphs of the past halvings have held on. Lessening supply and increasing demand simply means an increase of price after all.

[ashmodeus]

hohoho, that why i still hodl BTC , although its just a little.
btw , i wonder did btc price will surge before halving ? since we know , its need a time for make a effect from btc halving.
i have little speculation,surge may not come on this month or next month.

[alyssa85]

It's a nicely written article. Especially the 2nd narrative given in the article, is what the actual scenario will be! Understand a simple math of demand supply. If the demand of an asset remains constant and supply decreases, the price of that asset will increase. That's a very basic lesson of economics that we all read in school.

So as per the theory, the block reward will cut in half but the demand in the market is still robust, or even increasing day by day! So the price is supposed to be increased! I believe the current surge in price has already factored in the upcoming halving event and should continue in the same path! Let's hope for the best!

Yes, but counteracting that is the fact that most bitcoins don't move, so there isn't a lot of supply being sent to the exchanges. yet the price is not what it was two years ago.

What happened in the litecoin halving last August should be a warning. There was a pump to $150 up to the halving, and then the price collapsed to $50.

[Oasisman]

hohoho, that why i still hodl BTC , although its just a little.
btw , i wonder did btc price will surge before halving ? since we know , its need a time for make a effect from btc halving.
i have little speculation,surge may not come on this month or next month.

If you're not aware of the Bitcoin price movement from the past 2 halving, both have almost identical movements with different price range. In a 6 months span before the halving, Bitcoin price tends to have a slight growth over the time of about 50%. Then, a year after the halving, Bitcoin's price reached new ATH. So, in this case, you might be right about the price surge not happening anytime soon.

[romero121]

hohoho, that why i still hodl BTC , although its just a little.
btw , i wonder did btc price will surge before halving ? since we know , its need a time for make a effect from btc halving.
i have little speculation,surge may not come on this month or next month.

If you're not aware of the Bitcoin price movement from the past 2 halving, both have almost identical movements with different price range. In a 6 months span before the halving, Bitcoin price tends to have a slight growth over the time of about 50%. Then, a year after the halving, Bitcoin's price reached new ATH. So, in this case, you might be right about the price surge not happening anytime soon.

Yes, the price movements over the past two halving were almost similar. This time too the same can happen. However who have made use of the bearish trend of the market investing on different altcoins at the lowest price get assured return on their investments this year. This time if there happens large scale growth in multiples of $1000 same as the previous time days close to halving surely we'll get to see new ath.

[bitcoindusts]

The thing with people who have a very wide imagination is that, they tend to lay path on opposite direction and debate on it.  Even though it has been proven on that two halving that Bitcoin price surge whenever this event happen, there is still ideas that comes out saying the other way around because of them thinking that Bitcoin is already priced.   But whatever their thought is , we cannot remove the fact thatthis halving,  the supply of Bitcoin is will be decreasing while the demand is increasing over time, thus making it clear that Bitcoin will surely gain a positive price movement in the long run.

[gentlemand]

What happened in the litecoin halving last August should be a warning. There was a pump to $150 up to the halving, and then the price collapsed to $50.

I don't believe any alt is comparable. They have little to no institutional or commercial buying. There's no Grayscale, Cash app or OTC markets worth mentioning for any of them other than ETH and I'll bet that's a ghost town most of the time these days.

The first places big arse buyers will look to is miners as they have a constant need to meet costs and investment in a way a holder does not. If they have half the good shit they used to every ten minutes then that's going to have an effect of some sort and an effect that will continue.

Resorting to having to prise it out of an existing owner's hands is a rather trickier and much less dependable option.

Hitting a 1.8% inflation rate just as the big league trading options and awareness heats up means that this halving, or possibly the next one, will be the one that pushed Bitcoin on to the world stage for good. It'll be seen as the most significant of all once their relevance has faded alongside the block reward.

[AbuBhakar]

hohoho, that why i still hodl BTC , although its just a little.
btw , i wonder did btc price will surge before halving ? since we know , its need a time for make a effect from btc halving.
i have little speculation,surge may not come on this month or next month.

If you're not aware of the Bitcoin price movement from the past 2 halving, both have almost identical movements with different price range. In a 6 months span before the halving, Bitcoin price tends to have a slight growth over the time of about 50%. Then, a year after the halving, Bitcoin's price reached new ATH. So, in this case, you might be right about the price surge not happening anytime soon.

It will definitely grow before halving but not maybe that high, even next year where others think that there might be an ATH again since bitcoin and altcoin already reach a too high increase by 2017 and many already see and experience how it pump and dump that might not attract others to invest again when there are countries banning it. But hopefully soon when mass adoption happens ATH may soon happen again.

[panganib999]

Yes, but counteracting that is the fact that most bitcoins don't move, so there isn't a lot of supply being sent to the exchanges. yet the price is not what it was two years ago.

What happened in the litecoin halving last August should be a warning. There was a pump to $150 up to the halving, and then the price collapsed to $50.

But then again, the supply is still being increased due to mining blocks of BTC right? So the supply still does make its way to the exchanges. And even if we say that most Bitcoins do not move, then the current market would be one with much more limited supply with a lot of demand, thereby causing a price increase still right? That is until the moment when those hodlers move out and dump their coins altogether.

Sides, why are we even comparing litecoin to Bitcoin? If we were to take what you just said about BTC not moving, it's already quite different with what litecoin was in its halving right?

[Dart18]

Yeah that is how it will be.

If the demand will get higher and the miners cannot give what is supposed to be the need in the market then, there should be an increase in value of it.
It is actually the simplest calculation in the financial industry.

With that, the miners could also support the needs on both end. (to them and to the bitcoin buyers.)

[Wexlike]

If the demand will get higher and the miners cannot give what is supposed to be the need in the market then, there should be an increase in value of it.
It is actually the simplest calculation in the financial industry.

With that, the miners could also support the needs on both end. (to them and to the bitcoin buyers.)

That is the magic of the bitcoin halving, a radical supply shock. I assume Bitcoin has one more insane bull run into its DNA before it is fully integrated in the mainstream finance set, when regular people can buy and sell coins without any hassle (even your grandmother in a bank). So it should happen in the coming halving era with a block supply of 6.25 coins/block.

It would also line up pretty well with the last rearing of the fiat paper system and the last straw of the central bank powers, until AverageJoe understands how fiat works. Looking forward to some fireworks.

[The Sceptical Chymist]

If the demand of an asset remains constant and supply decreases, the price of that asset will increase. That's a very basic lesson of economics that we all read in school.

Yep, I've had enough economics to understand supply and demand, but in the case of the halving supply is not decreasing.  It's just growing at a slower rate, and there's a big difference.  There's no reason I can see that bitcoin absolutely has to increase in price because of a block reward halving.  I've always suspected that this is what a lot of speculators expect, and they drive up the price in sort of a self-fulfilling prophecy type thing.

What I really don't want to see is the bitcoin market going buck wild and turning into a bubble like it did in 2017.  It's not healthy or sustainable when bitcoin grows in value so much that it starts sucking in investors who otherwise wouldn't be interested in bitcoin.  That's what happens in every bubble, and while it might be really fun for a while, it wouldn't go on indefinitely. 

[lixer]

I don’t really know if there is going to be an increase, maybe the speculation that there will be one might convince new investors to start buying and that in turn might lead to an increase since a constant demand and decrease in supply rate leads to that. I have seen some people predicting that there might not be another increase in price , there’s been increase twice in the last two halving, this time around it might be a different story.

According to an article written on Coindesk, the move from $3,300 to $12,000 means that the halving has already taken place, so that’s one of the reasons for doubting on whether there will be increase. Seriously I hope that the price will rise.

[bitcoindusts]

If the demand of an asset remains constant and supply decreases, the price of that asset will increase. That's a very basic lesson of economics that we all read in school.

Yep, I've had enough economics to understand supply and demand, but in the case of the halving supply is not decreasing.  It's just growing at a slower rate, and there's a big difference.  There's no reason I can see that bitcoin absolutely has to increase in price because of a block reward halving.  I've always suspected that this is what a lot of speculators expect, and they drive up the price in sort of a self-fulfilling prophecy type thing.

What I really don't want to see is the bitcoin market going buck wild and turning into a bubble like it did in 2017.  It's not healthy or sustainable when bitcoin grows in value so much that it starts sucking in investors who otherwise wouldn't be interested in bitcoin.  That's what happens in every bubble, and while it might be really fun for a while, it wouldn't go on indefinitely.  

Indeed you really have a great point and I really agree with you that is if we do not consider adoption but if we do, lets us say the adoption rate is constant (just an example),  With the incoming supply reducing its number by half in proportion to constant number of adoption, somewhere along the line, the price of Bitcoin will increase  because,  even though the number of additional demand is constant, the number of additional supply is reduced in half.

[gentlemand]

What I really don't want to see is the bitcoin market going buck wild and turning into a bubble like it did in 2017.  It's not healthy or sustainable when bitcoin grows in value so much that it starts sucking in investors who otherwise wouldn't be interested in bitcoin.  That's what happens in every bubble, and while it might be really fun for a while, it wouldn't go on indefinitely. 

But that's precisely what will happen. And it'll happen a few more times until it reaches some sort of plateau/ sensibleness. It's what brought most people in in the first place and it's what those on the sidelines are waiting for. The appetite is there. They want their green light and it'll be off to the races again.

I'd much prefer it if it wasn't that way. It would be a lot less boring most of the time. That's the pattern it's settled in.

[el kaka22]

Honestly this year is different than previous because in the end we are at a higher level in every possible aspect. People think that there could be MAJOR changes in the works after the halving but please do not forget that moving from 1 dollar to 2 dollars is easier because requires less money whereas moving from $9k to over $20k will take a looooot of money.

So, I assume this will be a good thing for bitcoin, certainly better considering there will be less inflation and less coins dumped into market that we have to cover every single day, it is literally 8 million less dollars to spend just to keep the price same, but in the end it won't be HUGE changes, just a good hype with some bull run that will eventually stop and we will get back to our already volatile world.