Bitcoin halving is coming: here's what bitcoin investors can expect now
Note: This article was published on 07.05.2020.
If you take a look at the news and various social networks, one thing quickly becomes clear: In recent weeks, interest in Bitcoin has risen significantly again.
A decisive reason for this is the Bitcoin Halvingwhich awaits us (from the current point of view - 07.05.2020) on May 12, 2020. This event is programmed in the Bitcoin code and will change a crucial parameter in the whole Bitcoin system. Therefore, the halving will directly affect the price of bitcoin.
In the following post, we'll show what Bitcoin halving is, what leading Bitcoin experts have to say about it, and how you can profit from it.
What is the Bitcoin Halving?
For the Bitcoin system to work, anyone can participate directly.
Participants in the Bitcoin network call themselves "miners." They calculate complicated codes that are used to encrypt transactions between two people.
This is a very computationally intensive process - the computers are running at full speed.
To make mining interesting and ensure that there will always be enough miners, Bitcoin founder Satoshi Nakamoto had a clever idea: he defined that the miners who solve the complicated computational tasks will get Bitcoin as a reward approximately every 10 minutes.
Initially, for every "bitcoin block" produced, 50 bitcoin went as a reward to the miner who generated the block.
If this were to continue, the number of Bitcoins would be unlimited. However, this would make Bitcoin uninteresting for investors in the long run, because Bitcoin would lose value as a result.
That's why the miner reward is cut in half about every 4 years. And this process is called Bitcoin Halving.
How will halving affect the Price impact?
Of course, we cannot predict exactly how the price will develop - that would be coffee talk.
But we can look at what has happened in past Bitcoin halvings.
A few months after the first halving in the fall of 2012, the price of bitcoin rose from $10 to more than $100 in May 2013.
The second halving took a bit longer, but again the price rose from the time of the halving in the summer of 2016 from about $650 to nearly $20,000 in the winter of 2018.
There are no guarantees that the third halving will have such a direct impact on the bitcoin price either.
However, if bitcoin follows this halving pattern, then there should be a bull run again in the period after halving.
What do Bitcoin experts say on this topic?
Anyone who has been on the Bitcoin train for a while knows that this cryptocurrency is capable of anything: big crashes and sharp rises within a few days - all this is not uncommon with Bitcoin.
But what will the coming Bitcoin halving bring with it?
A bitcoin expert is the Financial Analyst Preston Pysh. In the following YouTube video, he elaborates on various points about Bitcoin - for example, the huge reduction in the inflation rate due to halving. Among other things, Preston believes that the Bitcoin will not only go to 100,000, but to 200,000 - 300,000 US dollars.
Since halving falls directly in one of the biggest economic crises to date - triggered by the corona virus - he states that the subsequent central bank interventions will favor the inflation of conventional currencies. Investors are then likely to flee to gold, Bitcoin & Co.
If one appeals to the stock-to-flow model, such as Twitter user "PlanBthe Bitcoin price is likely to increase tenfold after halving.
The stock-to-flow model indicates how rare a good is. The rarer, the higher the valuation - at least that is the theory.
Gold, for example, has a very good stock-to-flow ratio because it is comparatively rare. Therefore, gold is very valuable. Since Bitcoin halving will drastically decrease the amount of newly mined Bitcoins, this will also have a very positive effect on the stock-to-flow ratio.
PlanB writes on Twitterthat the halving will initially proceed as in 2012 and 2016. According to the model he propagates, bitcoin should rise to ten times its current price - but only 1-2 years after halving.
He says that this halving will be crucial, as it will confirm or destroy his model.
Bitcoin entrepreneur Jimmy Song also has tweeted indirectly about the upcoming Halving.
He also alludes to the coming inflation of conventional currencies with his tweets: Every dollar printed by central banks would have winners and losers. The winners include banks, large corporations and already rich people. Private sector employees, the middle class and workers are among the losers.
He believes the system can experience a reset with bitcoin.
How can I trade with bitcoin?
If you want to profit from Bitcoin halving now, you can start trading Bitcoin.
Unfortunately, we can't predict how the price will develop - but we can help you start trading Bitcoin.
One way is the Trading via CFDs. CFDs are contracts for difference and getting started trading is comparatively straightforward. With CFDs it is possible to bet on rising or falling prices.
If you want to buy real bitcoins, it is recommended to use a reputable bitcoin exchange, which allows the purchase and sale of bitcoins.
The best-known Bitcoin exchanges include, for example, Coinbase or Bitcoin.com. Once registered, you can buy bitcoins on these exchanges with real money (e.g. with a credit card).
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