On May 11th 2020 at about 3pm EST, the entire cryptocurrency community watched on with great enthusiasm as bitcoin experienced its third halving. The halving event, according to historical data, has been quite important in heralding a bull run; therefore, it was not surprising that the market was generally very enthusiastic, rightly so, about it.
Forbes.com
A typical bitcoin halving, as the reader most probably knows, cuts the block rewards for miners by half, putting a firm cap on bitcoin inflation. Put more simply, the halving event cuts the supply of bitcoin, the new bitcoin that are minted, if you like mined, by half. Interestingly, bitcoin was trading at $8,800 just after the halving was completed.
Now, applying the principles of elementary Economics as regards the relationship between demand and supply, the minimum ideal price for bitcoin post having then would be $17,600 (two times the halving price) as long as it can be guaranteed that the demand for bitcoin has remained at least equal or greater than what it was at the time of halving.
Although it is hard to precisely say to what extent the demand for bitcoin has grown or declined post halving, if we look at the growing number of new bitcoin addresses, the recent purchases of bitcoin courtesy of institutional investors and the accompanying price actions, an objective evaluation would see that the demand for bitcoin is on the rise post having. Therefore, $17,600 ought to be the ideal price for bitcoin at the moment.
Given that bitcoin has been developing a support base around $16,000 in the last couple of days, it will not be surprising if it reaches $17,600 before the end of the year. From that point onwards, whether bitcoin goes up or corrects significantly (in the short-term) will be largely dependent upon the actions of those who bought a large chunk of bitcoin just after the halving. But ultimately, bitcoin should reach $17,600 and perhaps quadruple from there in the months ahead.
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I am betting on it hitting $20k before the end of this year
Yea looks very possible.
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This makes me smile.
Thinking that halving in mined coins amount should make make price double - seems like a very primitive and naïve perception.
1-Mining is not the only source of income for miners. Transaction fees are significant, fluctuates a lot, and in general grows "non-stop"
2-While we can see ( and predict, even decades ahead) what the inflation part is coming from the newly mined coins, NOBODY can tell for sure, how many Bitcoins are constantly lost. Some say there are lost 2-3 MLN BTC, some - over 4 MLN.
Personally I believe that the real lost amount of BTC is in the range of 4-6 MLN.
I know personally several new Bitcoin users, who have lost Bitcoin. I have lost some too.
I would say, that MORE than HALF of Bitcoin users are loosing (and will be loosing) some of their BTC in the first 2 years of their BTC use.
This is practically hardly avoidable.
And when I say "loosing" I mean not a hack, not a physical steal of private keys. But forgetting, losing physically, damaging the private keys, so NOBODY and NEVER will be able to move these coins again. NEVER. EVER.
My personal opinion - after last halving we probably have already entered into the phase of deflationary BITCOIN.
The total amount of bitcoin, still under control of the owners, is already shrinking.
Miners mine less than noobs are loosing all the time.
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Unless of course quantum computers would be able to figure out private keys. But then Bitcoin would have anyway a bigger problem that the lost keys.
Thanks for sharing your thoughts on this topic. I clearly get the arguments you're making. At any rate, I do not think that lost bitcoin could as well account for a tendency for price to double as much as a halving of supply.
I honestly will like to know whether miners get the transaction fees from the bitcoin already in circulation or new bitcoins are mined to pay for the fees. If the former is the case, then fees can do little or nothing to the inflation.
Thanks for sharing your thoughts.
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Fees always come from the coins already in circulation. Are paid by those who execute transaction
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Thanks for the clarifications. Cheers!
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