Topic: Bitcoin Halving (Read 250 times)

This has been the trend since the inception of Bitcoin and that has made it a reason most persons now believe it's most definitely going to follow that same pattern, in economics, there's a law that states that when things become scarce the demand increases which causes the price of such to inflate, so applying that to Bitcoin halving, what's expected is the increase in price there after the halving but then this information isn't a financial advice.

This has worked in the past years and many others have benefited from this so it has become such that people have trusted to probably happen in such way again since it's looking like it now the norm after it has happened for several years following the same pattern.

The sense of scarcity is because there's lower and lower amount of BTC rewarded to miner that's gonna get dumped to the market so that they can cover their operational cost I think, the circulating supply of BTC on the other hand will still increase and total supply will still stay the same, because miner is expending energy to mine fewer amount of BTC, they'd consider the value of BTC to be more than when halving hasn't occurred yet.

the price however doesn't necessarily always increase whenever halving occurs granted the rewards for mining become lesser and lesser because as you have stated, it's foreseen event and everyone know the date.
but what people have figured out is that after halving usually bullrun occur, which might not necessarily relate to the scarcity of BTC after halving but another whole event based on market sentiment on its own.

Bitcoin halving happens but it's not always necessary or available for most of these traders to bag profits during this era. Halving happens once in every 4 years and the previous ones, it was completely overhyped and we understand the system, basically not dependent on the criteria but on our solid strategies.

We can only have the historical past of Bitcoin to say that it is not yet price-in. And you are right when you say that the demand is lower and so it is scarce and with that, the basic law of supply and demand can be applied.

The thing is that there are investors, might be newbie who thinks that after the halving, we will see right away that the price of bitcoin is going to increased and goes parabolic. It's not like that, although halving is the catalyst for a bull run, we really need to wait for the market to take off. And as of this month, it is not happening yet because of negative news, so we really need to have patience and look at the bigger picture regarding the effect of bitcoin halving.

Isn't the condition for the market price to increase not only because there is a demand but rather because the demand outweighs the supply? 


How the market reacts is dependent on the demand if the existing supply pressure is already given,

1. if there is no sell pressure from the miners and holders and at the same time no demand pressure, the market price of BTC won't go down, it will only stagnate or go sideway.
2. If there is no sell pressure from the miners but there is a sell pressure from the circulating supply and there is still no demand pressure for BTC, the market price will go down because the supply outweighs the demand.
3. If there is no sell pressure from the miners and the demand outweigh the existing supply pressure then the price of Bitcoin will increase.

I'm curious why you distinguish between coins owned by "someone" and coins owned by miners.


There already is no "sell pressure" from miners anymore. Compare the number of coins produced each day to the total number of coins sold each day. The fraction sold by miners is insignificant.

You're both right and wrong.
Right about subsequent halvings being less impactful than the first ones. Wrong about them not having a large impact. It's not going to be a "we're going up 20x" impact, like in 2017, but it's going to remain significant and let me tell you why. Right now the reward dropped from 6 to 3, next time it's going to be cut by half again, but the difficulty is now higher than it was in January (before halving). This means that the cost of each newly mined bitcoin raises gradually due to difficulty and also due to halving.

Where do we get coins for sale to satisfy the demand? Currently there are only 2 ways. Someone who already owns bitcoin can sell it to you and you can get a supply of fresh coins from a miner.
That second option is going to slowly disappear with every halving. That's why despite less coins being left to mine with each year and each halving a smaller fraction of the total supply, the price will continue to rise as long as there is demand.

I'm curious how the market will react when there's no sell pressure from miners anymore.

The halving does not lower the supply of bitcoins. The supply of bitcoins increases every block until there are 21 million bitcoins. At no point does the supply go down.


That is a bad analogy because bitcoins are not consumed.


The price of a bitcoin does not depend on production costs.  In fact, it is exactly the other way around. Due to how mining works, the production cost tends to approach the price. In other words, the production cost depends on the price.


Why do people always say that miners will never sell at a loss? That is absurd. A miner must pay for their operating costs by selling their bitcoins regardless of whether the price is higher or lower.

The Bitcoin market has its history and there are something can get from its previous cycles.

Rather than writing it here again, I invite people who are either newbies or don't have enough experience with this market, explore some interesting things from history.

• Bitcoin price history, ATHs and bottoms.
• Are you ready for the Bitcoin bull market? What's your plan? Some ideas for you
• Some good strategies to invest successfully with Bitcoin
  
  • DCA vs Smart DCA, what do you choose?
  • HODL bitcoins, you can do it! Look at HODL camp map to build up strong hands

People have different views on it. But what I understand, if the reward is decreasing by 50% at each halving, miners will have to spend same amount to generate 50% less Bitcoins. Which means the production cost of each Bitcoin increases. Ideally, this is enough to increase the price of Bitcoin. Because no miners will be selling their Bitcoins at a loss.

But crypto market is very dynamic and a lot of factors go into pricing of each coin. It is almost impossible to factor those while predicting the price.

Why is it a problem if the price increases?
Regardless of the halving, the price of Bitcoin changes and in the long term is constantly on the rise. Otherwise, historically, after each halving, the price of Bitcoin went up at some point.

Bitcoin halving is the major reason why Miner rewards keep reducing 50% for every four years session and it makes Bitcoin to be more scar's after a period of time in which normal called Bull Run market session. In other words patient in the cryptocurrency market is the key to success of Bitcoin and alt-coins holder.

In general, the price of Bitcoin is determined by two things, the first by its scarcity and the second by its own demand which continues to increase all the time. This means that the market itself is not the only role that determines the price of Bitcoin even though the market is the place to see the price of Bitcoin itself. Because the price benchmark will always depend on the number of enthusiasts and also the amount of supply circulating in the market, it can make huge changes in the price of Bitcoin itself.

previous halvings showed that after halving, the price of bitcoin does indeed reach a new all time high however this does not guarantee just how much high bitcoin can go. the market will still be well affected by other factors for example economical events

it should be noted tho that the increase in price will not be immediately seen right after halving i see a lot of people saying that this year seems to be when will bitcoin finally drop because it’s not setting a new ath after halving these people are impatient and will most likely lose some money a bull run always happens after a halving event

The value of an asset will be determined by supply and demand, so don't just depend and focus too much on supply while demand for it does not increase. Therefore, you need to find out and monitor whether the demand for bitcoin increases or not, from there you will know whether the value of bitcoin will continue to increase or decrease.

It seems that what you want to ask is that the halving has been completed but why is the price of bitcoin not increasing but even decreasing, right? If this is your question then to be honest, no one will dare to guarantee you that we will definitely have a bull season after the halving. It is true that it has happened three times in the past and people are depending on it but in the end, there is no guarantee that history will repeat itself again. That's why we often say that we should only invest long-term in bitcoin instead of speculating, and also don't invest in bitcoin just because of the halving.

It's not approximate, it's exactly 50% (I guess later rounded when hitting satoshi but it's always been 50% so far.

It does lead to scarcity of new coins minted but I don't think there is ever been a scarcity in terms of not being able to get BTC you want. Besides, with current price, you would need to be a billionaire to run into a problem of exchanges not having enough coins.

Everything continuously priced in

What leads to price increase in bitcoin is not directly on the reduction of the block rewards, but it also indirectly constitutes for that, because whennthere is reduction in block rewards after every successful halving, the market demands increases as the supply decreases while the network as well increases in bitcoin adoption, this makes it more easier for the orice to increase as holders will want to sell high at a profitable rate, but the indirectly influence of this has been what occured through the reduction in the block reward causing increase in value fornbitcoin.

Bitcoin halving is coded by Satoshi Nakamoto to happen every 210,000 blocks that is a correct number. Every 4 years is an estimation, not correct number because days between 210,000 blocks can be different but we know Bitcoin average block time is 10 minutes. Sometimes block time is shorter or longer than 10 minutes.

Bitcoin Halving Countdown

Block rewards reduce by approximately 50% is an inaccurate information. What reduces 50% is block subsidy, not block reward to be corrected. Block reward is bigger than block subsidy, in other words, block reward equals to Block subsidy plus transaction fee.

We know block subsidy halves (reduces 50%), and will Block reward reduces 50% or not, it depends on transaction fees.

Controlled supply
How is the 21 million bitcoin cap defined and enforced?

The bitcoin market is a free market.  It is highly influenced by the supply and demand.  So as long as the demand keeps on increasing, Bitcoin halving can help in increasing the price of Bitcoin.  The reduced in supply of Bitcoin can create hype and attract more investors thus creating more demand in the market. But I believe that the effect of Bitcoin halving will diminish its effectiveness and hype when the total number of supply is almost mined out.

I don't think that halving will continue to have a greater impact on the Bitcoin price.  I think the first few halving events will have a huge impact on the Bitcoin market but the later halving impact on the Bitcoin supply would be almost non-existent.  There is a huge difference between a supply reduced by 25 BTC and a supply reduced by 0.005 BTC. (on a later date). The one that will have a continuous impact on the Bitcoin market is the increasing demand for the coin.


If the demand stagnates and the supply continues to flow in the market, no matter how huge of an amount of BTC supply is deducted from the incoming supply (block reward), the only trend of Bitcoin market will be downward.  So, in my opinion, the determining factor that increases the price of BTC is its increasing demand, not the halving of the block reward.

Nicely explained, to make it for easier for OP, let's take another example that, if there is a bakery with some special cake, people rushed with the mentality that these cakes will be finished soon because the supply is limited. So, they will rush to buy it as soon as possible and in the start the price will pump not because of scarcity factor or halving factor. But because people with the mentality of supply will be out or from FOMO (fear of missing out).

Will rush to buy result in high demand and we will see a price increment just like we saw before halving. I know there are other factors included that can affect the price but these factors (like government involvement and other bad news) are not going to affect BTC. Because they all are in favor of it.

So, after some gap when there will be lesser supply the price will start to increase. But some people might sell there cakes back and can cause a high selling pressure. And then may buy back to sell again.

The market cannot price in something that hasn't been in effect yet.

The deal is, when halving comes coins become expensive to mine, but the amount of coins being mined is only about 900 a day worldwide. It will take months before these new coins enter the market in such numbers that they impact the price. Imagine that there's 500k coins on an exchange and a large miner deposits 1000 coins a month there and he cannot sell below the floor mining cost which is somewhere around $50k. After 3 months he'll only have 20% of the supply of that exchange in fresh, more expensive coins, while the other 80% is "cheap" coins, minted with a floor price of 20k and lower (because that's what it was in 2023 and before).

The more post-halving coins enter the market the greater the impact of the halving on price, which is why bull runs usually start a year after.

This bitcoin halving thing happens around every 4 years which reduce the block rewards by approximately 50%. This is forseen as to help lower the supply of bitcoin into market which lead to increase of scarcity. So the problem is, will this block rewards reduction actually lead to a price increase due to scarcity or if the market has already priced it in?