Post-Halving Bitcoin to Hit $100,000 in 2020? It’s Unlikely, Data Shows:
In around 300 days, Bitcoin (BTC) will experience what is known as a “halving” or “halvening”. This event, which occurs in predictable four-year cycles, sees the amount of the cryptocurrency issued every ten minutes halve, this time from 12.5 coins to 6.25 coins per block.
This is Bitcoin’s monetary policy, which is practically set in stone due to the consensus mechanisms that Satoshi Nakamoto implemented into his brainchild.
While the halving may seem mundane, with it being something that the mainstream and media outlets can easily gloss over, Bitcoin investors have clutched to these events as precursors to bull rallies.
Just look to the below chart. As the long-term, logarithmic chart of BTC’s price history accentuates, the halvings, marked by the black vertical lines, were what seemingly kicked off parabolic moves higher, during which the cryptocurrency market saw spurts of growth that can be defined by orders of magnitude.
Halvings Unlikely to Boost BTC or LTC: What?
It may seem crazy to believe, but research completed by Strix Leviathan, a Seattle-based crypto startup, and first spotted by CryptoSlate indicates that halvings may not have as much of an effect on the price of Bitcoin-based assets as the hype indicates.
The analysis of data on 32 halvings across 24 crypto assets, which includes Bitcoin and Litecoin, suggests that there is no clear evidence that crypto assets that see their emission halve “outperform the broader market in the months leading up to and following a reduction in miner rewards.” In fact, Strix’s researchers suggest that for Bitcoin in particular, halvings actually act as a negative catalyst leading up to the event, which goes somewhat against the narrative put forth by many on Crypto Twitter.
Strix attributes the hype around these block reward reduction events to “limited sample sizes and historical data”, coupled with the idea that fundamentally, a reduction in Bitcoin and Litecoin issuance should result in some form of positive price action, barring that demand for cryptocurrencies shrinks that is.