As bitcoin halving is just two years away, a lot of price predictions have started appearing across discussion groups. In bitcoin’s short history the two previous halving have resulted in significant bull runs. With expectation being the same this time as well, a Redditor has uploaded a graphic which states Bitcoin could reach $1,000,000 dollars somewhere between 2020 and 2023.
2023 is the year when bitcoin touches new high according to the Redditor
A user named “btcph” posted on Reddit, a graphic whose trend lines state that Bitcoin could reach $1,000,000 dollars somewhere between 2020 and 2023. But the interesting thing is that after 2023 Bitcoin would reach $10,000,000 dollars. Whether that’s a realistic approach or not is yet to be seen, of course.
Halving is when there is a 50 percent reduction in block rewards on the Bitcoin blockchain, is only two years away. Unless there is an abnormal change in hashrate, the reward for successful Bitcoin miners will drop from 12.5 to 6.25 BTC per block in May 2020.
Hence as the post was published, the comments started flowing in as most users felt that these targets were too astronomical and looked unrealistic. a Reddit user known as grengrad commented:
“Bitcoin would equal the USD M1 Monetary Supply at $200,000 per coin. Bitcoin would equal the USD M2 Monetary Supply at $800,000 per coin. Bitcoin would equal the value of all assets on earth at $11,000,000 per coin. Bitcoin is not going to be worth $10,000,000 per coin in your lifetime. The network effect is NOT exponential, it is sigmoidal.”
Another Redditor named GabeNewell also commented saying
“If a real bull market returns, and we surpass $100,000 per coin… I don’t see an end in sight after that. The definition of Network effect is that the value of a network is exponential to the number of people in the network. In addition, the network grows exponentially. The important thing is that Bitcoin is an all-or-nothing scenario. We’re either going to hit equilibrium at <$300/coin or $10,000,000 per coin. Either Bitcoin works as a currency, or it doesn’t (and then is only used for crime). Bitcoin hit $20,000 on speculation. Imagine if we get enough people to have a real self-sustaining economy. That’s the gamble. Is Bitcoin going to actually show real-world use?”
Getting to the history of halving
Bitcoin is less than a decade old. Thus, history might not paint a complete picture. However, historical patterns and trends are an excellent place to begin any price analysis. There have been two Bitcoin halvings: 2012 and 2016. Halvings occur every four years or after 210,000 blocks have been mined.
Both halving events have happened before significant bull runs. Whether the price rallies occurred as a consequence of the block reward reduction is unknown. A year after the 2012 halving, BTC price rose to $1,000 in November. At the time, it was the highest ever recorded price for the number one cryptocurrency. A year after the 2016 halving, Bitcoin also reached another record milestone. BTC price rallied to an all-time high of $19,500 in mid-December 2017.
The historical pattern shows Bitcoin prices booming one year after each previous halving. However, history doesn’t always paint a complete picture when it comes to the cryptocurrency market. Case in point, the anticipated Consensus price rally failed to happen this year even after many leading experts made bold predictions.
With the street already divided over what would be the price post halving, it is definite that for the price to go high and stay there, Bitcoin will need a definite use case. If the prices rise without Bitcoin having any fundamental growth, it would be only because of speculation and that rise would soon fizzle out.
Is halving of Bitcoin actually correlated to its price or is it just a passing event? Do let us know your views on the same.