Interest in the upcoming halving of Bitcoin is hot because of expectations that the halving will lead to a rise in bitcoin price. Of course, no one knows what the outcome will be. However, some predictions can be made through the last two half-lives.
Bitcoin price changes before and after the last two halving.
The first halving in 2012 served as an opportunity to properly understand how the market should respond to the halving in the future. In fact, until then, the Bitcoin community did not accurately predict how the block compensation would affect the network if it was halved. However, right after the halving, bitcoin prices began to soar.
Then, four years later, ahead of the second halving, expectations for a price hike have heated up. About a month before its third halving, CoinDesk is running a live blog specializing in halving, and Blockchain Dotcom is offering a countdown service. Various speculative sites have also appeared to predict changes in bitcoin prices after the halving.
On July 16, 2016, the price of Bitcoin fell about 10% to $610 on the day of the second halving. However, it quickly recovered to the level before the halving. In other words, there is no evidence that the sudden decrease in issuance due to the halving has had a long-term impact on bitcoin prices. At the time, Jacob Donnelly of CoinDesk mentioned the halving as a “boring vindication,” suggesting that the halving had little to do with long-term price changes.
As such, the price change was not significant immediately after the second halving. However, over the next year, the price of Bitcoin gradually increased. Some interpreted this as the effect of the halving appeared belatedly. In theory, the supply of Bitcoin decreases, but if demand remains the same, the price naturally rises. If this logic is correct, we can expect price increases in all subsequent half-lives, including the forthcoming third half-lives.
However, some say that the change in mining volume through this does not have a significant impact on price changes because the Bitcoin halving schedule is already set. Bitcoin traders have long known that block compensation is decreasing, and have been prepared for it for long enough. However, if the halving is fully recognized and many investors have bought Bitcoin in advance, it is right that the price increase starts before the halving. This is why they view the prospect of price increase after the halving negatively.