Bitcoin in time of halving - a brief review.

[Lucius]

With regard to the main topic these days (BTC halving 2020), and the many questions posed by beginners, (but also some who have been in the forum for a long time) I don't think it would be a bad thing to break some myths and clarify things.

BTC Halving is an event which happens about every 4 years, or to be more precise every 210 000 mined blocks. We have had two such events so far (2012&2016), and each time reward (mined BTC per block) decreased by half from 50BTC to current 12.5 BTC, and in next 10+ days that reward will be 6.25 BTC per block. This would simply mean that in the next 4 years the number of new mined BTC will go down from 1800 per day to 900 per day.

Why is halving so interesting to anyone involved in any way with Bitcoin? The reason is very simple, everything is really in the numbers I cited above, and the bottom line is that it would reduce the amount of new BTC while increasing or holding current demand could lead to an increase in price. That's exactly what happened in the previous two halvings, so most are reasonably hoping the same will happen a third time.

Let's try to look at the current situation now, because as we know in the past few days the price of BTC has increased by about $2500 (from $7000 -> $9500), and some started talking about the new big bull run and new ATH even this year. I still think it's just about recovery that is follow after 11/12 March sharp decline and declaration of world pandemic, and that the real effects will be felt only after a few months or only next year.

For all those who are wondering what is the smartest thing to do now, we can say that it is never too late to invest, but also that it is not a bad time to sell if you are making a profit. What is wrong in my opinion (although I understand it from a short-term investment perspective), is waiting for moments like this to invest. Someone said long ago "the time to buy is when there's blood in the streets.", which some did and have almost doubled their investment.

Almost identical discussions took place before the last halving, and I think the same will be in 4 years, which leads us to the conclusion that BTC will not disappear as some predicted, and they do the same today.

Local Rule : Anyone post which will include whole OP quoted (first is an exception) will be deleted.

[ranochigo]

There are quite a few principal considerations to be made with regards to halving.

The extent as to which the supply is affected would be very much related to the amount of Bitcoins that the miners are currently releasing into the market. Given the relatively low labour cost and electrical cost in China, I doubt the miners are releasing a significant amount of Bitcoins into the market and that the halving would result in a significant reduction in supply. There's obviously no way to tell as there can't be a sufficient sample size to see what the miners are doing.

The demand for Bitcoin is varying a lot nowadays. Given the current climate, the price increase is very likely due to people cashing into Bitcoin as the economy weakens around the world and that those who cashed out during the Covid pandemic are slowly shifting the funds back into their various investments together with the speculation prior to the halving.

IMO, the halving wouldn't be the main factor influencing Bitcoin's value and there would be a myriad of factors surrounding the price. It isn't a sound investment advice to buy into Bitcoin solely based on the fact that there's a halving but it would require the investor doing his due diligence before committing a reasonable risks to the investment.


* Of course I'm not a qualified economist but it's just a representation of my thoughts.

[mk4]

because as we know in the past few days the price of BTC has increased by about $2500 (from $7000 -> $9500), and some started talking about the new big bull run and new ATH even this year. I still think it's just about recovery that is follow after 11/12 March sharp decline and declaration of world pandemic, and that the real effects will be felt only after a few months or only next year.

I have the same thing in mind. This is why I've said a decent number of times here on Bitcointalk that I think we're going to get a drop in price in the short term after the halving, as there's a significant number of people counting on a price pump after the halving for some reason. If a pump in price doesn't happen, I'm guessing that some of those disappointed people will be selling. But then again, it's just my guess. It's also possible that a FOMO chain will happen; like a domino effect, depending on how much publicity and hype the halving event will get.

[crwth]

Since the halving is fast approaching, I think most of the things that surround Bitcoin is the topic Halving. For sure, there are a lot of articles already for newbies to read but it's not wrong to clarify things, especially in Bitcointalk.

As we know the situation with cryptocurrency, the fast-moving market makes it hard for people to see the importance of having it at a discount because it's not going to get any better than that. It's always going to be hesitation at the current market but future regret for not buying it, and it's sad. For us, it's easy to invest some of the hard-earned money that we make since we support it, but for new-comers, it's going to be quite hard.

The current happenings around us would certainly heal,. Still, right now, no one can predict when it's going to be finished, the pandemic situation, just like the prediction of what the price would be on investment, in this case, Bitcoin, after the halving.

BTC is not going to disappear, that's for sure.

[Yatsan]

The current happenings around us would certainly heal,. Still, right now, no one can predict when it's going to be finished, the pandemic situation, just like the prediction of what the price would be on investment, in this case, Bitcoin, after the halving.

Halving is the most anticipated event with bitcoin since it has seen some huge pump and dump in prices whenever it is happening, but this time we might or might not get what we are expecting it to be since we have a global pandemic and economic crisis. It looks perfect from the time that we had a price decline last March, approximately 2 months before the halving, 2 months of preparation for us to ride. As @lucuis said, it's not too late to invest coz  I think we haven't reach the peak of the pump yet.

BTC is not going to disappear, that's for sure.

How can you say this? I mean it is obvious, fiat is designed to inflate indefinitely unlike bitcoin that has a fixed number on which more people will choose over the collapsing fiat, sooner or later people will realize it.

[SpanishSoldier]

Historically, ATH happens one year after halving.

To be specific, 2013 ATH came 368 days after halving in 2012. 2017 ATH came 525 days after halving in 2016.

So, if the trend continues, next ATH will be in 2022.

[Coyster]

What the newcomers should know is that there is no certainty on what is going to happen after the halving, so if they are buying bitcoins, they do not start expecting ROI that are not possible in the short term, I'm sure those newcomers interested in btc only because of the halving have no desire to hold longer than immediately after the halving, so if there is no spike, but instead a dip, they are going to be left with fear, uncertainty and 'disappointment'.

[hatshepsut93]

Historically, ATH happens one year after halving.

To be specific, 2013 ATH came 368 days after halving in 2012. 2017 ATH came 525 days after halving in 2016.

So, if the trend continues, next ATH will be in 2022.

Every trend becomes broken sooner or later, otherwise the price would be too predictable. I'd say it already happened year ago, when the price went from 3k to 14k without any real reason. So I totally expect that this time it will be somehow different - maybe new ATH will come sooner than expected or won't come at all, maybe there will be a bearish market, or maybe a big bull run will start in just next few days. Either way, Bitcoin was always doing something unexpected, and right now everyone expect a repetition of 2016-2017.

[cafetools]

There is a lot of potential for Bitcoin to reach high prices, and the people who will gain the most is the HODDLERS who hold for the next 10-15 years.

The people who dont make mistakes with thier BTC, like not investing into HYIP ponzi schemes are going to be the ones who still have BTC years from now. Freaking out about meaningless %20 selloffs can lead to people losing chunks of thier BTC.


Bitcoin is a evolving item, and does the reverse of inflation because people lose access to thier private keys over time, this affects supply.

In my view if you can obtain 1 Bitcoin today you will be able to buy a small house in 10 - 15 years

[odolvlobo]

Why is halving so interesting to anyone involved in any way with Bitcoin? The reason is very simple, everything is really in the numbers I cited above, and the bottom line is that it would reduce the amount of new BTC while increasing or holding current demand could lead to an increase in price. That's exactly what happened in the previous two halvings, so most are reasonably hoping the same will happen a third time.

That is not why it is interesting to me. It's not even true. (I challenge you to explain it using real economic theory).

Anyway the reason it is interesting for me:

1. It is a reminder to everyone that the bitcoin supply is fixed, and it can never be inflated away by central banks or governments.
2. It is an event that gives everyone a reason to celebrate the continuing success of bitcoin.

Happy Halving Day!

[mk4]

That is not why it is interesting to me.

Well, unfortunately, as we all know a lot of people are in the bitcoin space just to make money, with barely having interest in the technology itself.

It's not even true. (I challenge you to explain it using real economic theory).

Which one specifically? I'm definitely nowhere being an expert in economics, but isn't the law of supply and demand pretty straightforward?

[odolvlobo]

That is not why it is interesting to me.

Well, unfortunately, as we all know a lot of people are in the bitcoin space just to make money, with barely having interest in the technology itself.

It's not even true. (I challenge you to explain it using real economic theory).

Which one specifically? I'm definitely nowhere being an expert in economics, but isn't the law of supply and demand pretty straightforward?

"Law of supply and demand" is a thing, but what you are calling "supply" is not supply. It is production.There is no law of production and demand. You can twist meanings by calling it "new supply" or "supply of new coins", but in the end it is not supply.

The number of bitcoins (also called "supply", unfortunately) is constantly increasing toward 21 million, and the halvings slow down the increase. As the number of bitcoins increases, the bitcoins available for sale, the "supply", also increases. Since the number of bitcoins is always increasing, so is the supply.

[Latviand]

Since the halving is fast approaching, I think most of the things that surround Bitcoin is the topic Halving. For sure, there are a lot of articles already for newbies to read but it's not wrong to clarify things, especially in Bitcointalk.

As we know the situation with cryptocurrency, the fast-moving market makes it hard for people to see the importance of having it at a discount because it's not going to get any better than that. It's always going to be hesitation at the current market but future regret for not buying it, and it's sad. For us, it's easy to invest some of the hard-earned money that we make since we support it, but for new-comers, it's going to be quite hard.

The current happenings around us would certainly heal,. Still, right now, no one can predict when it's going to be finished, the pandemic situation, just like the prediction of what the price would be on investment, in this case, Bitcoin, after the halving.

BTC is not going to disappear, that's for sure.

We have nothing to do if the bitcoin is really coming to us because it is a behavior of bitcoin to do the process of halving every 4 years, it includes this year 2020. I know that some newbies here are not that knowledgeable about halving that's why there are some topics related to that so they what to do when that event occurs.

The demand of bitcoin will surely goes up because of the number of bitcoin that becomes half of the main supply. There is a drop in its price but it is just temporary, we all know that bitcoin is volatile and the market so you don't need to worry that much but instead, you should manipulate your assets properly to prevent losses.

This pandemic brought some major effects to our economy but we will surely recover to that because I know that governments will work hard to retrieve its losses in the stock market. Most especially those bitcoin holders who are panicking, don't panic and just execute good transactions and good decision making.

[pooya87]

1. It is a reminder to everyone that the bitcoin supply is fixed, and it can never be inflated away by central banks or governments.
2. It is an event that gives everyone a reason to celebrate the continuing success of bitcoin.

that is true but to me there is a number 0 to these two.
initially halving acts as a catalyst more than anything else. there are always a lot of people who want to buy bitcoin but they are either too scared of a possible drop to buy it during stable times or they are too greedy and are waiting for the possible drop to buy bitcoin. i see this a lot.
when halving, a very hyped up event, happens and there is a rise it acts as that catalyst which practically pulls in all the money that was waiting in the doorway to enter but weren't. when the rise begins then it's just a matter of snowballing.

[Cnut237]

I've said a decent number of times here on Bitcointalk that I think we're going to get a drop in price in the short term after the halving, as there's a significant number of people counting on a price pump after the halving for some reason.

I agree, and I've posted quite a few times about this too. There is inevitably a lot of FOMO as the price rises in advance of halving... but halving is already priced in. This means prices rise higher than is really justified, which will surely then lead to a drop when the event actually occurs. We see this time and time again with alts as well as bitcoin. It's the old maxim of 'buy the rumour sell the news'.

I would have to add however that this is all about the immediate effect of halving. Long-term, halving will I'm sure have a positive impact on price... it's just that people shouldn't anticipate magically accelerating upwards price movement the instant that the transition to lower block reward occurs.

[Lucius]

I have the same thing in mind. This is why I've said a decent number of times here on Bitcointalk that I think we're going to get a drop in price in the short term after the halving, as there's a significant number of people counting on a price pump after the halving for some reason...

Definitely some people see BTC as another asset they can profit from, but they don't want to invest in the long run, but are waiting for some moment like the upcoming halving. This is quite understandable given the volatility that BTC has, and it is a quick in quick out method, which sometimes pays off and sometimes it doesn't. There is no doubt that some investors might be disappointed after halving because they expect a big pump, but on the other hand it may happen. I think a bigger FOMO might be missing out if we don't reach $10 000, because the media certainly will not be too interested in this story unless they have the material to clickbait headlines.

That is not why it is interesting to me. It's not even true. (I challenge you to explain it using real economic theory).

It may not be true in the literal sense of the word, but one average user understands it that way. People are not too interested (or generally lacking the necessary knowledge) to engage in discussions at this level. Most people can't or don't want to understand the technical or economic side of the story at all, and it comes down to "tell me when to buy and when to sell". The only time they don't ask for advice is right now, because they expect the past will repeat itself and that they will have easy profit.

Every trend becomes broken sooner or later, otherwise the price would be too predictable. I'd say it already happened year ago, when the price went from 3k to 14k without any real reason. So I totally expect that this time it will be somehow different - maybe new ATH will come sooner than expected or won't come at all, maybe there will be a bearish market, or maybe a big bull run will start in just next few days. Either way, Bitcoin was always doing something unexpected, and right now everyone expect a repetition of 2016-2017.

I would disagree that there was no reason, but other than some theories that have been made public, we may never know what the real reason was. The theory that everything was cooked up by Bakkt was quite popular back then, which of course may not be true. Anything you mentioned can happen, and I would just add a pandemic factor that will certainly play a big role in how BTC will behave as experts say in the recession that is at the door, and it should be much more dangerous than one started in 2008.

[sureshverma]

I still do not understand whether there was a halving of bitcoin or not?

[sheenshane]

I still do not understand whether there was a halving of bitcoin or not?

Of course, there is, since we already experienced the first and second Bitcoin halving event.
It might help you, Bitcoin Halving, Explained

I understand the essence of halving and how it may become an advantage to me and other investors. Though it already happened in 2012 and 2016 as expected everyone considered it profitable to themselves. However, for this year that we are close to the halving, we are seeing that the price of bitcoins is shaky though, it is already obvious that bull run has taken its place, and that for me doesn't guarantee that same thing will happen again like in 2012 and 2016. In fact, I must admit that right now I don't do any action like selling or even buying a bitcoin because for me even the scenario has already been tested before still there is no guarantee on what will happen next after this halving.

[so98nn]

Why is halving so interesting to anyone involved in any way with Bitcoin? The reason is very simple, everything is really in the numbers I cited above, and the bottom line is that it would reduce the amount of new BTC while increasing or holding current demand could lead to an increase in price. That's exactly what happened in the previous two halvings, so most are reasonably hoping the same will happen a third time.

Do you really think that previous halving and conditions around it were the same as they are today? Lets not forget with what world is suffering right now. I dont want to go again over that covid stuff since we all know it.

It's sad reality that not everyone is enjoying halving this time as they are out of their job, businesses and much more. So here comes the twist, may be first everyone will prefer to stabilise their current situation and then they will invest money into BTC

it would reduce the amount of new BTC while increasing or holding current demand

There won't be demand if there is no need of it!

I believe there could be 50/50 chances it will burst like anything or stay on the steady growth curve.

[Lucius]

Do you really think that previous halving and conditions around it were the same as they are today? Lets not forget with what world is suffering right now. I dont want to go again over that covid stuff since we all know it.

I wrote something in the OP about that aspect, and of course I'm aware that the pandemic is affecting all markets, including Bitcoin. Accordingly, nothing is predetermined so any outcome is possible. I personally hope that the new ATH will be achieved in Q3/Q4 2021, or maybe in 2022.

It's sad reality that not everyone is enjoying halving this time as they are out of their job, businesses and much more. So here comes the twist, may be first everyone will prefer to stabilise their current situation and then they will invest money into BTC

It depends how you look at it, some invested long before the pandemic while the price was still below $5000, some were preparing for halving by investing during crypto winter 2018 when 1 BTC could be bought for only $3000. Those who are long-term investors can definitely enjoy halving carelessly, regardless of the situation.

There won't be demand if there is no need of it!

Currently, the market is showing that demand exists, but it remains to be seen whether this is merely a consequence of the investment of those who count on halving for short-term profit, or whether the price will remain stable/continue to rise after halving.


FriedeFritz, this topic is not about SEC or ETF.