There are exactly 250 days to go before Bitcoin’s next halving event. After that, the BTC reward that miners receive for adding new blocks to the blockchain will be slashed in half from the current 12.5 BTC to 6.25 BTC. As the landmark event approaches, the internet is speculating about whether or not it will cause a surge in Bitcoin’s price. If history is any indication, it should.
Bitcoin Halving in 250 Days
In 250 days, Bitcoin will undergo its third halving and the supply of freshly minted BTC will be reduced by half. Exactly 250 days ago, CryptoPotato explained the event and what it will mean for the network.
Basic economic principles dictate that if the demand for an asset increases or stays the same as its supply is reduced, its price should go up. That’s what happened to Bitcoin’s price following its two previous halving events. The BTC price increased by a factor of 10 in less than a year after the first halving back in 2012, and by more than 400% in the year following the second halving in 2016.
Not surprisingly, people are now wondering if the same thing will happen in 2020 after next May’s halving.
Is History an Indicator?
A big question, however, is whether the halving was priced in during this year’s bull market. It’s impossible to know that for sure, but popular trader Moon Overlord made a correct prediction based on historic facts back in April.
He stated that on average, the cryptocurrency has started pumping around 1 year prior to a halving date.
#Bitcoin has traditionally starting pumping around 1 year on average before it’s halving date
The next halving is estimated to be May 2020, meaning that the uptrend will begin in May of this year
— Moon Overlord (@MoonOverlord) January 23, 2019
Bitcoin really did rally hard in May. The price rose from around $5,200 at the beginning of the month to about $8,200 at month’s end, marking an increase of more than 57%. It will be interesting to see whether or not this pattern holds before or after the 2020 halving.