The third Bitcoin (BTC) halving is well on its way in just a few days, as of this writing.
‘Bitcoin halving’ search trends on the rise
‘Bitcoin halving’ searches have increased considerably since the beginning of 2020, according to Google Trends.
Earlier last month, “Chinese Twitter” Weibo also saw an increase in search trends for the same keywords.
This signals that the market hype on BTC has finally been picking up steam.
Bitcoin going viral on "Chinese Twitter"
The topic "Bitcoin Halving" was the sixth-most searched in the past 24 hours, DESPITE China effectively banning the purchase of #Bitcoin through yuan.
We are 18 days away, and things are just heating up! ???? pic.twitter.com/IvmLEWg9Xy
— Altcoin Daily (@AltcoinDailyio) April 23, 2020
Coupled with the global recession that has been punishing local markets worldwide, the community is all eyes on BTC as well as its “make-or-break” event.
What does BTC halving mean?
Bitcoin halving, as the term suggests, means that the BTC to be rewarded to miners is going to be halved. From the previous 12.5 BTC per block mined (currently valued at US$111,377 [AU$173,404]), it will now be approximately 6.25 BTC.
It happens after every 210,000 blocks mined in the BTC blockchain before the mining rewards are cut down by 50%. This effectively limits the supply of coins circulating on the BTC blockchain.
According to CoinMarketCap, we are expecting 32 BTC halving events in the history of the coin. After the last, the maximum supply of the coin will have reached its maximum supply of 21 million.
When will this happen?
The next event is due on May 12 at 04:30:17 UTC, as per the BTC countdown.
Looking back at the young history of the coin, BTC halving has happened only twice.
The first one took place on November 28, 2012, and the second on July 9, 2016. And in both those events, BTC showed a surprising price action.
Back in 2012, during the first halving, BTC made almost 8,000% price increase in just a few months. On the second halving in 2016, BTC soared by 2,800% within just 18 months.
As of this writing, the market cap for BTC is sitting at $163.66 billion, with 18,361,987 circulating in the market.
When the third halving takes place, the supply of BTC in circulation will be practically reduced again.
Mixed reactions to BTC halving
There are mixed speculations about the possible outcome of BTC prices as the event takes its course.
Jason Williams, the co-founder of Morgan Creek Digital, believes that the event will not do much for BTC prices, claiming it as a “non-event.”
Unpopular Opinion –
Bitcoin halving in May 2020 won’t do anything to the price. It will be a non-event.
— JWilliamsFstmed (@JWilliamsFstmed) December 1, 2019
In an interview with Williams published by Forbes, he said:
“Large miners that are holding BTC will have to sell to cover operational expenses or use cash as revenue halves. New buyers have to come in to move this market up.”
Tuur Demeester, the founder of crypto firm Adamant Fund, shares the same sentiment. In his tweet a year ago, he remarked that for BTC to even maintain its current price, a huge growth in market demand is necessary.
For BTC to retain its current price at $8,000 until the May 2020 halving, we'd arguably need to see net positive demand of $2.88B before then. That's what's required to buy up all newly minted BTC at $8k in next 200 days.
— Tuur Demeester (@TuurDemeester) October 23, 2019
There are some, however, who are more optimistic about the event.
Danny Scott, the founder of CoinCorner, tweeted his observation about the price of BTC relative to the previous halving events. He said that there are significant patterns emerging.
#Bitcoin price 1st May
2012: $???? 1st Halving
2016: $???????????? 2nd Halving
2020: $????,???????????? 3rd Halving
— Danny Scott ⚡ (@CoinCornerDanny) May 1, 2020
Cameron Winklevoss, the co-founder of Gemini and half of the infamous twin BTC millionaires, shared with his followers his excitement for the halving.
Less than a fortnight until the Halvening. Bitcoin's on the move. Can you feel it?
— Cameron Winklevoss (@winklevoss) May 1, 2020
As the third BTC halving comes a few days closer, it has never been more important to remain prudent about riding the hype. Investors have to keep in mind that BTC is still a volatile currency. There is no assurance it will follow the price trends we have seen from the first two halving events.