It really is all a Bit Crypto - The amount of Bitcoin that gets created every 10 minutes gets cut in half every four years. This is known as the Bitcoin Halving. The next Halving will be Bitcoin’s third and will take place in May 2020.  This is when the current block reward of 12.5 Bitcoin every 10 minutes will be cut in half to 6.25 Bitcoin. Seeing as the maximum supply cap for Bitcoin is 21 million, halving the block reward means that it will take longer for all Bitcoin to enter circulation.

If you don't have the patience to read this entire post, you are welcome to skip ahead to short vids at the bottom. 

BTC Countdown 

But this also means that less and less new Bitcoin will be created over time and due to its limited supply so Bitcoin will continue to become increasingly scarce. And scarcity enhances value or so the experts say. Historically, the Bitcoin Halving has proven to be an important catalyst that propels Bitcoin value. In fact, Bitcoin tends to begin its new bull trend at least a year before its Halving.

But what effect does the Bitcoin Halving have on Bitcoin’s price?

The first-ever Bitcoin Halving took place at the end of November 2012. It took approximately 513 days for Bitcoin to rally over 13,000% from the $2.01 bottom to the Market Cycle top of $270.94. Bitcoin’s first Halving was a key catalyst that spurred significant growth and a new bull cycle for Bitcoin. As soon as Bitcoin reached its post-Halving peak of $270.94, the 2013 Bear Market began as Bitcoin’s price declined 80%. This Bear Market lasted approximately 87 days.

The second Bitcoin Halving took place in early July 2016. It took 1068 days for Bitcoin to rally over 12,000% from the $164.01 bottom to the Market Cycle top of $20,074. After the $20,074 peak — Bitcoin entered a 51-week bear market that bottomed in mid-December 2018.

Let’s first consider Halving #1. It took Bitcoin 513 days to rally as much as 13,304% from its pre-Halving bottom of $2.01 to its post-Halving top of $270.94.

Now let’s look at Halving #2. It took Bitcoin 1068 days to rally as much as 12,168% from its pre-Halving bottom of $164.01 to its post-Halving top of $20,074.04.

The similarity across both Halvings is that Bitcoin rallied approximately 12,000–13,000% from the bottom of the pre-Halving bear market to the top of the post-Halving bull market.

But a crucial difference is that it took Bitcoin twice as long to experience that similar growth around the second Halving period (1067 days compared to the 513 days around Halving #1).

The third Bitcoin Halving is estimated to take place on the 17th of May 2020. As of this writing, it has taken Bitcoin over 260 days to rally over 340% since its $3,152 bottom set back in mid-December 2018. This means that Bitcoin’s price bottomed approximately 519 days before Bitcoin’s third Halving. This is very interesting because there are some key similarities in comparison to Bitcoin’s second Halving.

Here are the figures in question for Bitcoin’s second Halving:

• Bitcoin’s price bottomed 544 days before its second Halving.

• Bitcoin rallied 383% to reach its pre-Halving top prior to its second Halving.

Most of the exponential growth in Bitcoin’s price as a result of the Halving occurs after the Halving. Leading up to Bitcoin’s first Halving, Bitcoin rallied 663% to reach the pre-Halving top of $15.51. Once Bitcoin bottomed after its -50% pre-Halving retrace, Bitcoin rallied over 3400% post-Halving to reach its Market Cycle top of $270.94. Leading up to Bitcoin’s second Halving, Bitcoin rallied 383% to reach the pre-Halving top of $794.91. Bitcoin rallied 4080% in 524 days to reach the Market Cycle top of $20,074.

The amount of Bitcoin that gets created every 10 minutes gets cut in half every four years. This is why the Bitcoin Halving has figured as an important catalyst that spurs significant growth in Bitcoin’s price. It is an event that guarantees legitimate scarcity. And the exponential appreciation in Bitcoin’s price is a testament to a very important principle in financial markets — scarcity enhances value.

It is important to develop an understanding as well as the ability to appreciate, with a level-head, the historical significance of the Bitcoin Halving effect on Bitcoin’s price. After all, Bitcoin’s historical price action has shown the Bitcoin Halving to be a unique type of event that tends to make investors money — not only heading into the Halving but many months after it as well.

However one thing is for sure, there is no real way to predict what will happen to the value of BTC after this next halving and anyone who says they can predict the outcome is not in touch with reality, the markets will always be volatile as it is human nature to speculate in the never-ending pursuit of a quick buck.

No-one could have predicted the advent of the Coronavirus and how it is having such a catastrophic on the world economy as countries shut borders, travel is reduced by double digits, airlines are shutting down under the economic pressure, the main stock markets are in free fall, global events and mass gatherings from conferences to entertainment to sports are either postponed or canceled, the short term future is indeed looking bleak. 

The human race is resilient and this too shall pass and by Q4 2020 this chapter in our collective history will be a fading memory, a new reality will have been etched in the future of the world and perhaps this is the quantum shift towards a more decentralized global economy, with cryptocurrencies taking a more central role in the lives of average working-class people worldwide, and with that a greater need for people to hold Bitcoin in their portfolio's.