One of the reliance on the astronomical prediction of the price of cryptocurrency to rise to the tune of $50,000, $10 million and more is the Bitcoin halving effect. As the cryptocurrency space awaits 2020 for another halving, expectations of Bitcoin rising to $1 million and more are also expected as well.
Bitcoin halving is the reduction in the reward gained from bitcoin mining due to the difficulty in the mining process. Expectedly, this would increase the value of the bitcoin cryptocurrencies in circulation.
The essence of the difficulty in mining is to slow down the volume of bitcoin in circulation to avoid hyperinflation. In the traditional banking system, the increase of the printing of money and its flow leads to hyperinflation. A means to prevent hyperinflation of bitcoin and still cause an increase in the value of the coin in circulation is the essence of bitcoin halving.
According to the bitcoin white paper; it is to be halved after every 210,000 blocks are mined or four years. Bitcoin halving took place in 2012 and 2016 respectively with the next halving expected to take place in 2020.
Halving is designed to emulate gold-mining, as gold-mining inevitably becomes more expensive and difficult over time, as more and more of the earth’s gold reserves are mined out. This has aided the maintenance of its steady rise in value over the past centuries.
Bitcoin Halving and Effect On Bitcoin Price
As expected the price of bitcoin is to rise as each halving takes place. The halving of bitcoin mining in the year 2012, and 2016 all led to the rise in the value of bitcoin respectively.
The aftermath of the halving of 2016 saw the value of bitcoin rise to its all-time highest of almost $20,000.
Based on the predictions by cryptocurrency enthusiasts and analysts alike, the next halving in 2020 would have a drastic effect in stimulating the price of bitcoin to rise to $1 million or even $10 million. This opinion is supported by John McAfee, who predicted its rising to $1 million by 2023.
Bitcoin halving, institutional acceptance and fund injection are what bitcoin enthusiasts bank on for the astronomical rise in the value of bitcoin which would affect other cryptocurrencies as well.
Though the cryptocurrency market is experiencing bearish move presently, these factors give the cryptocurrency ecosystem hope for a rise in value shortly.