CoinMetrics Predicts Bitcoin’s Halving Will Push BTC Price Above $20,000 USD to All Time Highs
Bitcoin halvings are historically connected to price surges. If you follow the market for some years, you may know that already, but the relationship between the two occasions is actually very correlated.
The most valuable cryptocurrency in the world halves its block rewards from time to time and the next halving is set to happen in 2020, which could push prices up.
CoinMetric suggested that the peak of the next bull run will happen around 18 months after the next halving, which is set for the first half of next year. The trend is actually pretty clear. When the first two halvings happened on 2012 and 2016, the market was very positively affected.
For instance, the first time in which Bitcoin was over $1,000 USD was in 2013, more than 18 months after the first halving. We all remember the bull run of 2017, which also happened after the halving of 2016. During the halving, BTC was around only $600 USD and it reached $20,000 USD sometime later.
Now, Bitcoin is worth around $5,000 USD for the first time this year and the halving draws near, which is a great sign that the future will be bright for the investors. By the end of 2021, CoinMetrics affirmed, Bitcoin will see its third peak, which will be way above $20,000 USD.
The Halving Protocol
The idea of halving the rewards was created in order to stop Bitcoin from becoming too inflationary. Fiat currency can be emitted at any time, but Bitcoin is different. Its inflation rate decreases always that a halving occurs, which keeps prices more stable.
For instance, the inflation was around 25% when the first halving occurred, so it went down to 15% soon afterward and it stayed between 20% and 7% until the next halving, which diminished it even more.
With the second halving, inflation was able to go to under 5% for the first time ever and this rate has been maintained so far. At the moment, inflation is around 3.8% and it is expected to diminish even more after the next halving, which will take it to under 2%.
Also, the profit of miners goes down, so the prices end up going up as a way to compensate the people that make the network work.
The crypto industry is actually building a lot this year and becoming more mature. This will also impact prices, but more in the future than right now. Because of this added to the interest of institutional investors, we may even see a longer bull run which will take prices to the sky and peak at the end of 2021.