If you've prepared your mind for a Bitcoin halving on May 12, 2020, then you might want to have a rethink. Recent data shows that the halving will happen sooner than most people expect. Specifically, it will take place in April 2020. That being said, if you're hoping to dive into the market at the last minute, chances that you might be taken unawares are high.
So, the Bitcoin halving, what is it about and why is there so much hype around it? Should you also keep a close eye on Bitcoin (BTC), the largest cryptocurrency by market cap? We'll take a look at these and many more. Ready? Let's begin.
A Change in Bitcoin Halving's Date
A Bitcoin halving countdown widget culled from Blockchain.com shows that there are 84 days to the virtual asset's halving. Based on the widget's estimated time of arrival, the halving will occur on April 25, 2020, around 23:18:35. The latter goes contrary to the date May 12, 2020, which is being circulated on the net. As such, the halving may happen before some people's eyes without them realizing it.
Why Bitcoin's Halving Date Fluctuates
On the other hand, a lot of reasons have been tied to the varying dates in Bitcoin's halving. This event occurs every four years and precisely, every 210,000 blocks. A new block is added every 10 minutes. However, this time is only an "approximation", and as such, some blocks get added even before "exactly" 10 minutes has elapsed.
Another contributing factor in the change in date is that Bitcoin's hash rate has increased significantly since 2018. Consequently, it has slowed down the automatic difficulty adjustment, thereby leading to a change in the halving's date.
What is Bitcoin Halving?
For the uninitiated, Bitcoin halving is an event where the daily block reward to miners is divided or halved. Usually, miners earn Bitcoin for verifying transaction data. They currently receive 12.5 BTC daily as a reward per block mined but the reward will be split into half during the halving. Hence, only 6.25 BTC will be awarded per block.
In accordance, only 900 BTC will be supplied to the market daily instead of the current amount of 2,146.4 BTC. About $18.1 million Bitcoins have been mined already out of the 21 million BTC that can ever exist. There are also 2,805,613 BTC to be mined before this cap is reached.
What Could Potentially Happen After Bitcoin Halving
A lot of attention has been on Bitcoin this year, thanks to the impending halving. Google Trends shows that searches for 'Bitcoin halving' spiked in January 2020, compared to late 2019. There are speculations that Bitcoin's price may surge significantly after the halving due to a lower supply and higher demand for the asset.
For instance, two halvings have taken place since Bitcoin's launch in 2009, and these events occurred in 2012 and 2016 respectively. In 2012, Bitcoin was priced around $11, but its value at the end of December 2013 was about $1,100. Similarly, Bitcoin before its halving in 2016 was valued between $400 to $700 but surged to an all-time high of $20,000 by December 2017. If history repeats itself, then it means Bitcoin whose price today is about $9,300 could spike exponentially in about a year from now.
Cryptocurrency Community's Opinion on Price Surge
Plan B, a cryptocurrency analyst had taken a look at charts and analyzed what may become of Bitcoin in a few months from now. According to Plan B, the top currency may spike to $55,000 per coin after its halving this year. It's market capitalization, which is $170 billion today, could surge to $1 trillion. Plan B also stated that by December 2021, the asset could hit $100,000.
A poll carried out by the analysis reveals that 65.3% of people expect a price surge due to "cointegration between bitcoin price and stock to flow ." Stock-to-Flow attributes a price spike to Stock (the number of Bitcoins in circulation) and Flow (amount of new Bitcoin being circulated).
On the other hand, it may still be months into the halving, but Bitcoin has already made significant gains. As of January 1, 2020, Bitcoin was valued at $7,194. And by January 31, 2020, it had surged to about $9,500, thereby scoring 32% in gains. Compared to December 18, 2019, when it dumped to a month's low of $6,540, the asset has spiked by 45.26%.