A few days before the ” Halving “, the price of Bitcoin has crossed early this morning, a symbolic threshold.
© Unsplash – André François McKenzie
While the remuneration of the miners of the Bitcoin will be divided by two for Tuesday, the uptrend in the price of the crypto-currency is confirmed. Early this morning, the Bitcoin crossed the$ 10,000 threshold on the main platforms for the exchange of crypto-currency. Since the beginning of the confinement last march, the currency electronic has doubled in value.
In the chart below, we can see a steady increase in the price of Bitcoin on the day yesterday. It is past 9 076$ at its lowest, to almost 10 000$ in the space of 24 hours (+10%). While the Bitcoin has a tendency to lead the market in its wake, the other crypto-currencies have not followed – for the moment.
Why the Halving does he climb on the course ?
To understand what is the Bitcoin ” Halving “, it is necessary to understand how are made each and every transaction on the network. Every time a user sends Bitcoin to a counterparty, the transaction is verified by a computer that has been made available to the network by a minor. In the exchange of computer power, which allows secure transactions, miners are rewarded with Bitcoin.
Each time that 210 000 blocks (made out of thousands of transactions in Bitcoin) are verified by the minor, the compensation of the latter is divided by two. At the present time, and until next Tuesday (estimated), this compensation amounts to 12.5 BTC per block ” undermined “. It is this date that is called the Bitcoin ” Halving “. As soon as the 210 000-th block of this series will be validated, their compensation will drop to 6.25 BTC per block.
Therefore, why such an influence on the price of Bitcoin ? Unlike currencies like the Euro or the US Dollar, the amount of Bitcoin that will be produced at term has been set in advance, in the whitepaper of the crypto-currency (21 million units). Every time a miner validates a block of transactions, a 12.5 BTC are newly generated by the network. By dividing the compensation of the miners by two, that means two times less than Bitcoin will be produced.
According to an article on Bitcoin Prime Ervaringen, the miners who délestent Bitcoin generated for each transaction (to finance infrastructure) will be two times less on the market. Then the demand for Bitcoin is not expected to change, this should naturally raise the price of the crypto-currency – the ratio of supply and demand being out of balance.
Our fellow-member of the Express, Raphael Bloch has analyzed the evolution of the price of Bitcoin in the months following the two previous ” Halving “. If the upward trend is clearly marked in the wake of these events, past results do not portend anything about the future evolution. The crypto-currencies are renowned for their volatility, and earnings can quickly give way to significant losses.
Mai 2011 : 3 $
Mai 2012 : 5 $ (1er halving)
Mai 2013 : 120 $
Mai 2014 : 450 $
Mai 2015 : 220 $
Mai 2016 : 450 $ (2e halving)
Mai 2017 : 1.700 $
Mai 2018 : 9.100 $
Mai 2019 : 6.000 $
Mai 2020 : 9.200 $ (3e halving)
— Raphaël Bloch (@Bloch_R) May 7, 2020