Cryptocurrency

BTC in front of a new bubble forming?

The technology and development behind Bitcoin is extremely exciting. However, Most are only interested in the Bitcoin exchange rate. Therefore, moon forecasts, and other positive predictions are very popular, because it is the investors based their investment decision. This is also the reason why some react very emotionally when criticism of the project is expressed.
But where does this Bitcoin Halving moon forecasts and let the explain really all so simple? Perhaps there is something that shows us a clear direction for the Bitcoin exchange rate? In this article, we will try to find an answer.

Bitcoin is in its Form and creation of unique

Bitcoins has a heart beat of 2009 started. At the time, it was not to any profits or otherwise. It was purely about the long-standing dream of a decentralised currency is finally a reality. If you would have told the people at the time that Bitcoin, which at the time was more or less $ 0 – $ value, reached at some point, the 20,000 USD, then you would have been mocked. This feels similar, as if I would tell someone currently that Bitcoin in 10-20 years, at 1 Million USD.
The history of Bitcoin is unique and cannot be repeated in this Form. At least not with the same result. The have proven to us many Altcoins in the last few years already. But the history is not alone responsible for the fact that Bitcoin has so benefited from the network effect. Factors such as decentralisation, censorship-resistance, etc. play a crucial role also. In the history of mankind, there was never something like BTC. Something revolutionary needs time in order to have enough to build trust. Because let’s be honest, Most of the people in the world understand Bitcoin.

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Scarcity and inflation rate of BTC

However, one of the most important factors in BTC is its scarcity. Satoshi Nakamoto at the time, set the maximum number of 21,000,000 Bitcoin. The BTC should also not arise out of nowhere (premine), but must first be earned. It is actually quite simple. The Miner will be rewarded for your support and strengthening of the network and to get in return for the rewards in the Form of Bitcoin. This reward is available to each Miner that finds a Block. The amount of the reward has already been from the very beginning to set, and is currently at 12.5 BTC per Block found. Thus, about 1.800 BTC arise from day to day.
Satoshi Nakamoto has, however, something interesting come up. Every 210,000 blocks (approximately every 4 years) there will be a halving of the rewards – the so-called Bitcoin Halving. Thus, not only the revenue for the Miner, not the price drop by half at a constant rate of Bitcoin, but also the inflation rate. Currently Bitcoin has an inflation rate of approx. 3,67%. After the next Halving, this drops to below 1.8% and is below the inflation rate of Gold and silver.
This is one of the reasons why the regular Bitcoin Halving itself can have a positive impact on the price. The new offering takes from one day to another the half of ab, at least if we assume that miners sell most of their BTC to cover the cost of production. The supply shock but is not held directly by the Halving itself, but to be felt until months, if not years, and only then in the market.

99% of all Bitcoins emerge until 2032

But this is all still a short representation of the actual genius of Satoshi. If we look now into the future, then we see that the last Bitcoin will be approx. 2140 mined. Until then, we will experience every 210,000 blocks, a halving of the Rewards. Currently we are writing the year 2020 and have already gemint about 86% of all Bitcoin. In the year 2032, we will have already gemint 99%. Thus, it will take approximately 108 years, until it was found last percent. What does this tell us now?
This glimpse into the future shows us that we are still pretty early in the process, and the large Bitcoin Halving jumps can take. In proportion to the current amount of BTC that is in circulation, the current inflation rate is relatively high. Thus, the halving of the Rewards will have a huge impact on the Mining industry. Currently, miners earn every day around the world approximately 18.000.000 USD. After the Halving, there are ’onlyβ€˜ still 9.000.000 USD. Of course, on the basis of a fixed Bitcoin price of 10,000 USD.

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Halving effect decreases with time

This effect will decrease with time until it is not noticed at all really. Although the revenue of the Miner will be cut in half in BTC until 2140 but in the end, no major impacts on the actual offer. As an example, we take the year 2032. In 2032 it will come to the 6th Bitcoin Halving. At this time, already 99% of all Bitcoin will be gemint (approx. 20,79 million BTC). The inflation rate should be about 0,24%. One can imagine at this point, even very well that the impact of the inflation rate and the halving will have no significant influence on the amount of BTC already in circulation.
So, we can be very happy, the next BTC Halving follow live and to be so early in the process. Until now, there were only two Halvings, and each of them has sometimes led to a strong Bitcoin rate increase. Nevertheless, a certain Trend in the last Halvings can be seen. The Bullruns in accordance with the Halvings take longer and have a lower rise. Although the two events by Far are not conclusive but there is a certain tendency to show yet. Thus, it is always likely that any Bitcoin Halving the effect is slimming.

Satoshi’s planned formation of bubbles?

Can we expect another Bitcoin bubble after the next BTC Halving? Theoretically, Yes, at least if we look at the past Events. There is no guarantee but. Satoshi chose not to use this sudden halving certainly, quite unconsciously. He was well aware that the Bitcoin rate regular bubbles is subject to and thus the necessary attention. What reason would have it otherwise, that the rates of inflation reduction is halved every 4 years and is not decreasing smoothly from the Block Block?
We do not want to rely yet on any thoughts and predictions. The time will show us whether our assumptions have voted, or whether we need to re-new set up. We look forward in the current year and look forward to the next Bitcoin Halving. We will keep you as always in all of the major Updates. Stay tuned!

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We will have the Bitcoin Halving on the price actually? The effects of time and Satoshi has seen the regular blisters before?
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About the author

Eve Manning

Eve Manning

A native Texan, Eve first started out as a Finance Analyst and later realized that her true passion wasΒ not in trading but in writing. She leverages her experience in the Finance industry to analyse and write in-depth news articles covering the Cryptocurrencies, Economy & Finance industries.