There has been massive hype all around the world.
People have been screaming and shouting, ‘Bitcoin is going to halve in May 2020!’
It sounds exciting and momentous. But what exactly does this mean?
Well, when a halving happens, it means that the block reward for Bitcoin miners gets split and divided by 50%.
Before 11 May 2020, you would receive 12.5 Bitcoin for every block that’s mined. But as of May 11, you will now receive a total of 6.25 Bitcoin for every block that’s mined.
In a nutshell, that’s how a halving works. Bitcoin is now twice as hard to mine — which will potentially mean less supply and more demand.
Bitcoin could be set to skyrocket in value once again.
Why has the value of Bitcoin surged?
In a word: feverish excitement and anticipation.
Financial websites have been alerting everyone about this halving. As a result, Bitcoin has reached a high that it hasn’t for quite some time — it traded at a value of US$10,000 per coin.
At the time of writing, the value has retreated slightly to the US$8,500-dollar mark.
Are you concerned by this? Don’t be. We’ve actually seen this before. This is a similar pattern to how the markets reacted in the days leading up to previous halvings.
Here’s a historical reminder:
- When the first halving happened back in 2012 — Bitcoin went from a value of $12.31 to $994.21 within 369 days, a whopping 7,976% increase.
- When the second halving happened in 2016 — Bitcoin went from a value of $650.63 to $19,535.70 within 526 days, an impressive 2,902% increase.
We are now into the first day of the Bitcoin halving — which happened on May 11 2020. If history is any indication, the months and years ahead will be fascinating to watch.
Where could Bitcoin go from here?
The value of Bitcoin currently sits at $8,666.
At the moment, many investors are feeling a bit uncertain about investing in Bitcoin. They find it too volatile and risky.
Remember: Bitcoin was first created in 2009. It has never actually been tested in a global financial crisis. So investors are unsure how it may react in this environment.
Some experts believe that Bitcoin will potentially rise in value in the long-run. But we are in uncharted territory here as the world economy continues to battle the COVID-19 pandemic.
Bitcoin remains a speculative investment at this time.