Will Bitcoin Skyrocket Again After 2020 Halving? Will Bitcoin Rise to $100,000+?

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The third BTC halving will take place on May 30 this year. The fact that 50% less Bitcoin is generated every 10 minutes will change its cost.

This process is known as halving, and it has already happened twice, and each time leading to a price increase of Bitcoin (at least ten times higher). BTC is now quite common, but not many people are talking about it.

Today, we will look at the concept of halving, its impact on Bitcoin, and future expectations.

Bitcoin Uses the Deflation Model

The model of deflation refers to the fact that over time Bitcoin will be less and less and that the supply will eventually come to an end. In 2140, the next Bitcoin will be mined as its stock exceeds a limit of 21 million tokens by the algorithm used.

This model differs from the inflation model’s fiat currencies. The inflation model enables the additional currency to be created. For example, when necessary, banks can print some more currency. Since the amount of BTC is small, you can only mine it and not make it.

Bitcoin is deficient because of this concept of deflation. It’s more useful if something is incomplete.

Block Rewards

Miners must solve a “block” of transactions and add the BTC to the blockchain to generate a bitcoin. This is not a cheap operation. Specialized hardware and a huge amount of electricity must be used.

When the blocks are resolved, the miners are rewarded by bitcoins. Such coins are issued by the BTC algorithm and are referred to as’ block rewards’ every 10 minutes, meaning that new Bitcoins are mined every 10 minutes.

The first BTC block of awards was 50 bitcoins so that in 10 minutes a miner will earn 50 BTC and have it sent to his wallet. Unfortunately, much time has elapsed as BTC costs only a dollar and anyone can mine it with a PC or laptop alone. Miners are not making as much today as they used to.

The block reward does not exceed 12.5 BTC, as there were two halves already. This process takes place every four years; it is merged into the BTC and finishes in 2140. The next halving in May will reduce the block premium to BTC 6.25. It is also expected that the halving will greatly affect the price as it did the last two times.

Let’s discuss matters that can affect BTC costs and improve halving results.

The Difficult Mining Process

Bitcoin is not only inadequate because of its reduced block rewards, but because solving blocks and receiving bitcoin these days is quite complicated. This complexity is due to a large number of miners who come every day. Also, very powerful hardware is required to solve encryption algorithms.

As the issue of mining grew, miners began to create a “mining pool” to solve the blocks together and share the reward. These pools are essentially people’s networks that share processing power and reward.

https://i.imgur.com/xSvnSwu.jpg

The reward depends on how much power the block has contributed. For example, Slushpool has 15,700 active miners who share the reward for the 12.5 BTC block if they find a block.

At present, one costs $11,450, which means 12.5 is worth $143,125.

Imagine that every miner uses equal processing power. Each person would be given $9.11 ($143,125 − 15,700= $9.11), or BTC 0.00083 (12,5 − 15,700= 0.00079) for each block they were mining. A large mining pool of 15,700 persons would give the miners less than $10 per block if they were to contribute equal amounts. This is a far cry from the Block reward of $143,125 (BTC 12.5).

Bitcoin Halvings and Price Connection

Halving typically has a positive effect on the BTC level. There are many reasons that it has such great influence, but supply and demand are the simplest: the fewer bitcoins are made, the more precious and inefficient they are.

The block incentive from 12.5 BTC to 6.25 BTC will be high by halving this year. With the aid of our previous example, we will address this phenomenon. Let’s talk again of the 15,700 members of Slushpool, who will distribute the BTC 6,25 reward when they find a block.

If BTC’s price remains at $11,450, its value would then be $71,562,50.

Let’s imagine again that all miners use equal processing power. For every unit mined, each individual will receive 4.55 ($71,562.5 ± 15,700= 4.55) or 0.00039 BTC (6.25 μ 15,700= 0.00039). With this large mining pool of 15,700 individuals, miners will contribute less than $5 each for every block that they resolve. Two times less than in the previous example.

The Effect Of Halving On The Price Of BTC

Many find it pointless to use BTC after halving, while most users go on mining but sell their tokens at a higher rate and raise the price .. We should look back on the past to see how the halving affected Bitcoin’s value.

The First Halving

This happened on 28 November 2012 and the price for BTC was 11 dollars at that time. In 2013, the price rose to an incredible $1,100.

It only took a year for the value of BTC to be 100 times higher. Then the price fell by about $220 and remained for the next few years below $1,000. Although the price was lower, it was still 20 times higher than before halving through.

The Second Halving

This happened in July 2016. The BTC price was 600–700 dollars, and then in the bull run of 2017, it pumped to 20,000 dollars.

Before the second halving, the value of BTC rose 33 times its original price and by 1.818 times the value of the initial price before the first halving.

The Coming Halving and Expectations

How could we anticipate this year’s next halving?

It is anticipated that BTC will follow the trend to a new high in 2021. It’s reportedly ten times the price before it is halved, so $100,000, in this case, appears realistic.

Kraken CEO Jesse Powell claims that halving could lead to a price rise of $100,000 or $1 million for Bitcoin. Powell says, “I guess I think $100k, maybe $1 million when I hear people talk about a bitcoin correction. There’s another person who feels that Bitcoin can be priced at $100,000 in 2021, Anthony Pompliano, co-founder of Morgan Creek Digital Assets. That’s correct. “The economics of supply-demand remain valid,” he said. “To determine the market price, it is a great way. Therefore, if the demand for a fixed-suffering commodity rises, we’re already seeing price appreciation. “Anthony also believes that” the halving in May 2020, one of the main drivers for this market or the rise of scarcity, I believe is going to be a huge moment.

Attach this post to your bookmarks and see if the predictions are correct one more time in 2021!

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