Bitcoin Price Always Surges Following Halving, is $70,000 BTC Price Realistic in 2020?
The Bitcoin network will be experiencing its third halving in 2020 and it is a major event in the history of the cryptocurrency. The cryptocurrency community is looking forward to the event with many questions and expectations, one of which is if Bitcoin will experience the kind of price surge that historically characterized halvings.
Halving is an event that occurs once every four years on the Bitcoin network. It is basically the reduction of miners’ block rewards by half. This is important because every halving is a reminder that Bitcoin’s limited supply will soon be exhausted and the cryptocurrency could become a highly sought after commodity.
The first Bitcoin halving happened in 2012, a year after which Bitcoin surged to a price of over $1,000 for the first time since its creation. The second halving happened in 2016 and Bitcoin surged from $268 a year before the halving to over $2,500 a year after the event. As the third halving approaches in 2020, a cryptocurrency trader knew on Twitter as The Rhythm Trader is asking if the same pattern will repeat itself.
According to the trader, Bitcoin surged by 10 times of its 2011 Price a year after the halving in 2012. If the same pattern repeats itself in 2020 when the halving occurs, the price of Bitcoin should be over $70,000 by 2021. This could be why several analysts are projecting an incredible price surge for the asset by the end of 2021.
Notably, the host of Keiser Report, Max Keiser has predicted that Bitcoin could a price of $100,000 in 2021 and that is his price target. Keiser has not wavered in his belief that this is possible, considering the potential of institutional investors to enter the cryptocurrency market soon and bring in huge money.
The not so good part of the halving, however, is that as block rewards reduce, miners will have to depend more on transaction fees to cover mining expenses and make profits as well, and that means transaction fees will increase with the halving. Already, Bitcoin reportedly reached a transaction fee of up to $4 per transaction since February 2018 as reported by LongHash recently.
It has also been recorded historically that an increase in the price of Bitcoin correlates with an increase in transaction fees, so Bitcoin users may just have to live with the high fees pending when a solution is found. The question now is, will Bitcoin see another surge following the 2020 halving?