May 13 will be an important day for Bitcoin. That’s when it will be “halved”. Halving refers to the reduction in the amount of Bitcoin paid out for miners. The website Medium explains further. “This halving is another step in Bitcoin’s rapidly decelerating supply. Because of Bitcoin’s halving rule, there are only ever going to be twenty-one million Bitcoins, and there are only 2.5 million Bitcoins waiting to be released. The rest are already in circulation.
“In 2009, the reward for each chain mined was 50 Bitcoins (can you imagine that?). After the initial halving, the reward was 25, and after the second, 12.5 Bitcoins. On May 13th, the reward will be 6.25 Bitcoins.
“The halving process ensures that new Bitcoin will be released until around 2140, but also means that the remaining Bitcoin will become more valuable as new currency added begins to taper off. Bitcoin’s scarcity will begin to move closer and closer to assets like gold.”
Experts remain split on what, if anything, this will do to Bitcoin’s price.
The website, Coin Telegraph, reported on a major Bitcoin trader, going by Joe 007, who expects a bearish move.
On twitter he responded to another twitter user with this sarcastic response, “No, of course it’s not priced in. On the very day of The Great Halvening, everybody will finally realize how underpriced BTC is, and they will all rush to buy it. In droves. With their unemployment checks.”
Forbes sees it differently, quoting an expert stating that prices will rise as a result.
“As the third halving event to occur, there are expectations for what might come after, with history telling us that the bitcoin price will typically begin to rise significantly within the 12 months following a halving—something that can be simply put down to supply and demand,” said Danny Scott, the chief executive of Isle of Man-based bitcoin and crypto exchange CoinCorner, to Forbes.
Meanwhile, the website, Coin Desk, noted the smaller, Bitcoin Cash, had its own halving and it was a non-event.
“All in all, this has been very anticlimactic,” Denis Vinokourov, head of research at Bequant, a cryptocurrency exchange and institutional brokerage, wrote in an email to Coin Desk.
The Market Intelligence Firm, Glass Noted, noted that recent price moves are bullish.
“The event will see BTC’s inflation rate cut in half and many analysts expect this supply deficit to be greeted with a significant price rally.
“In the weeks leading up to this milestone, a number of on–chain metrics are suggesting that investors agree with this bullish sentiment and are increasing their positions and holding tight.
Bitcoin was trading at roughly $7700 for one unit as of Tuesday April 28. It has seen a significant increase in the last year, up from $5155 on April 28, 2019.
Over the last month, it has also done well, up from $6251 on March 28.
