The halving, the 50 percent reduction in block rewards on the Bitcoin blockchain, is only two years away. Unless there is an abnormal change in hashrate, the reward for successful Bitcoin miners will drop from 12.5 to 6.25 BTC per block in May 2020. The burning question is what effect will the block reward reduction have on the price of Bitcoin?
A Little Bit of History
Bitcoin is less than a decade old. Thus, history might not paint a complete picture. However, historical patterns and trends are an excellent place to begin any price analysis. There have been two Bitcoin halvings: 2012 and 2016. Halvings occur every four years or after 210,000 blocks have been mined.
Both halving events have happened before significant bull runs. Whether the price rallies occurred as a consequence of the block reward reduction is unknown. A year after the 2012 halving, BTC price rose to $1,000 in November. At the time, it was the highest ever recorded price for the number one cryptocurrency. A year after the 2016 halving, Bitcoin also reached another record milestone. BTC prices rallied to an all-time high of $19,500 in mid-December 2017.
Halving and Bitcoin Price
The historical pattern shows Bitcoin prices booming one year after each previous halving. However, history doesn& …
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