LIVEHow Does Bitcoin Halving Affect The Price of Bitcoin?
Halving is a double-edged sword, for different groups, it means different things.
For investors, halving means a reduction in the frequency at which new bitcoins are generated and less propensity for miners to sell. Historical data indicates a positive effect of the expected scarcity on the investors’ psychology. Investors expect a rise in the value of bitcoin and more buys could follow.
Past mining events have seen positive effects, however, the effect of halving events on bitcoin price is prone to variations, depending on prevailing market conditions.
Building up to the 2020 halving, bitcoin’s price rose about 40% thanks to investor behavior and the speculations that followed the event. Sequel to the halving, bitcoin’s value rose to three times its previous All-time-high, hitting a new high of $67,000.
For miners, halving ultimately means a reduced reward. Setting up and maintaining a bitcoin mining facility is a costly venture and miners expect the block rewards to at least offset these expenses.
When the reward is halved, miners’ revenue reduces by half. Considering the presiding values and cost of running a bitcoin mine, many miners might shut down their mining set-up if they are unable to maintain the facility with the calculated post-mining revenue.
As miners halt their activities, the mining hashrate is expected to drop. A decrease in mining hashrate could slow the bitcoin network and cause transactions on the blockchain to be executed later than they used to. Hashrate could return to former values if bitcoin’s price continues to rise and miners see profitability in running a mine again. #BinanceLaunchpool #Memecoins #BullorBear #WIF
