It finally happened, after a lot of weeks of debates, predictions and discussions the 3rd Bitcoin Halving happened on 11 May 2020. Surely the most expected event of the year for the cryptocurrency, but what really happened ? Like a lot of people stated the Halving is actually going to have a positive effect in the long term.
However we can draw a portrait of what happened the last 4 years and what will in the next 4. Let's talk numbers, statistics and predictions concerning Bitcoin past & future.
1. Let's go back in 2016 and see what path Bitcoin took :
As you might know every 210.000 blocks the reward for mining a block is divided by two (it is what we call the halving), the first happened in 2012 (50 BTC per block to 25 BTC per block), the second in 2016 (25 BTC to 12.5 BTC) and the third in 2020 (12.5 BTC to 6.25 BTC). First, as a comparison to 2016 the exchange volume during the halving has been 50 times higher in 2020 ($1.5 billion in 2016 against $30 billion in 2020.
Another statistic brought by glassnode showed that the number of Bitcoin address between 2016 and 2020 increased a lot, especially address for 0.1 BTC (+142%) and 0.01 BTC (+204%). This stat is quite interesting because it shows that more and more new people are buying and investing in Bitcoin and other cryptocurrency, it reveals a huge gain of popularity for cryptocurrencies over the last four years.
Concerning the last two halving, what did we learned ? Well first we learned that it's a long term effect, the price wasn't supposed to peak straight after the halving and it didn't. In 2012 the price went from $13.00 to $1.242, but it took more than a year, then in 2016 the price went from $750 to $19.874 (all time high), this time it took 17 months. But we also learned that growth depends on other equally important factor, and we also learned that every time the effect of the halving is different, and it is especially the case for this 3rd halving (I'll talk about it later in the article).
The excitement around halving was surreal the week before, as a result Bitcoin price dropped and spiked multiple times and was around $8.700 during halving. And finally at 19:23 UTC on May 11, 2020, the third halving happened, the last block was mined by Antpool and marks the beginning of a new era for Bitcoin and Cryptocurrency in general.
All in all, during this 4 years period Bitcoin story has evolved a lot, managed to bring Bitcoin and cryptocurrencies in another dimension, got a huge gain of popularity, attracted investors and more and more crypto-enthusiastic but what's next ?
2. Bitcoin future : where is it heading ? :
In itself the event didn't do anything to the Bitcoin price straight away but you have to consider the halving as an abstract milestone but with a serious meaning. It's not a question on a positive effect straight away but on the long term, like a lot people said : every day that Bitcoin is still alive, ensures its future. But what does it truly mean ?
Every people, investors and traders have their opinions, some consider this is the end of the road for Bitcoin while others think that Bitcoin future is brighter than ever. Let's first see why people are being sceptic, according to them because the halving is only affecting the reward received by the miners it isn't enough to impact Bitcoin's price in a positive way because the miners are no longer as important as before. Mainly because the mining is still asking a lot of power and is not being very rewarding, unlike few years ago when miners weren’t that many and rewards were higher. They also stated that the sale of Bitcoin will move from miners to the stock market. This change in BTC trade, will slow down the increase in the capitalization of the Bitcoin market.
However the majority of the people are being enthusiastic and optimistic about Bitcoin's future and there are a lot of reasons to be. Some stated that the reduction of the new supply available and a reduction in the sale by miners of their ongoing production to cover costs could significantly reduce the sales pressure endured by miners. This, combined with macroeconomic events and entries in Bitcoin’s passive investment products "could cause a perfect situation for the price of Bitcoin in the medium and long term". Moreover the growing popularity of Bitcoin and cryptocurrency during these recent months and years will participate to create a rarity effect (combined to the others factors mentioned), in this situation Bitcoin's price would reach summits during next years.
Combining those new data, with a stock 2 flow model, people established that Bitcoin price could reach $100.000 at the end of 2021, then $300.000 by 2024. Many factors indicate that you can believe that Bitcoin could reach the sky but also indicate it could slowly collapse.
To conclude, the only think we can do is analyze and just wait, only time will tell us if we have entered in the golden ages of Bitcoin and cryptocurrency or on another hand the chaos era, but one thing is sure : cryptocurrency story has only begun.
