Bitcoin halving event Is expected to take place in May 2020, and just as the impact had on the cryptocurrency market in the previous event, it is expected that another bull-run will hit the market with Bitcoin leading the movement as it has spread over effect on the altcoins. Firstly, let’s look at Bitcoin Halving.
Bitcoin halving is an event scheduled to take place every 4-years. It technically has to do with dividing the Bitcoin block mining reward by half. The first event occurred in 2012, and the Bitcoin block mining reward was divided from 50 BTC to 25 BTC. In 2016, the event saw the mining reward being divided from 25 BTC to 12.5 BTC. The next event which will take place in May 2020 will cause the mining reward to be divided from 12.5 BTC to 6.25 BTC.
How Will This Cause Another All-Time High
From the Bitcoin price history, the price of the digital asset recorded an all-time high of $1242 in 2013, a year after staging the Bitcoin halving. Similarly, the Bitcoin price recorded another all-time high of near $20,000 in December 2017 after the halving event in 2016. It is highly likely that there will be another all-time high probably in 2021 after the halving in May 2020. Despite the fact that this analysis is always true and it is enough for technical analysts to draw a conclusion on how the market will be like, there is a more plausible reason for this.
The division of the Bitcoin block mining reward by half will make it more expensive to mine the digital asset. What this means is that a number of miners would be pushed out of the market leaving those with access to free electricity and cheaper input. In economics, the decrease in production leads to an increase in price. Miners who incur higher electricity costs and other charges just to mine Bitcoin and make a little or no profit would definitely be pushed out of the market. This is an underlying factor that pushes the price up on the Bitcoin price curve and a very good reason to agree that there will be another bull-run that will take the price above its all-time high.