Bitcoin halving is an event that accounts for reducing the reward earned in mining new blocks by half. It suggests that post the event; miners would get hold of 50% lesser number of Bitcoins for every transaction done. The process of halving Bitcoin is done once in four years or roughly after every 210,000 blocks until around 2140.
The next Bitcoin halving is scheduled to take place onn 18 May 2020. The first Bitcoin was launched back in 2009, and since then, the process has been executed twice. This year’s halving would be the third done till today with total blocks rising upto 630,000.
Impact of Bitcoin Halving
One of the significant effects of Bitcoin halving is the slashing Bitcoin reward. Back in 2016, the reward associated with Bitcoin fell from 25 to 12.5. This further led to the hike in Bitcoin pricing, rising from $576 to $650 right before the event. And the trend doesn’t seem to halt as prices keep rising.
A similar pattern was recognized back in 2012 at the time of first halving. The reward dropped from being 50 to 25, and the price kept rising, starting with a shift of $11 to $12 before halving and reaching up to $1038 by 2013.
TRADING BITCOIN IN 2020
One question that arises here is who benefits from the process of Bitcoin halving or who would be worried about the same?
Traders, at most, are the ones influenced by the process of Bitcoin halving, let alone the idea of increasing prices. There are two significant ways one can trade Bitcoins.
- To theorize the price of the Bitcoin prior and post halving (use derivatives such as CFD)
- Purchase Bitcoins through an exchange.
While purchasing coins might be a risky affair, it is best to opt for the first way. In fact, there are multiple ways of trading Bitcoins using derivatives such as CFD.
- Enables traders to enter into the business without actually having any amount in the wallet. This implies that they work on a no-risk basis, trading without an account.
- It allows you to take charge and speculate whether the prices would rise or fall.
- Gives the ease to fill in the deposit, also referred to as the margin and then go ahead to attain wider exposure of the market. This, in a way, creates an ecosystem where traders can attain higher profits with a small investment.
The End Result
Bitcoin halving might be disruptive and even fatal for miners from the viewpoint that their activity would turn obsolete and no longer profitable. The unprecedented cost associated with the same even compels miners to shut down the activity totally. What remains consistent with the time is total Bitcoins being generated. The software is designed such that it automatically balances the number of blocks mined. The sole purpose behind Bitcoin halving is to save and not spend, in a way revolutionizing the way people trade.
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