February 1represents not only the end of a long January but 100 days to the expected Bitcoin mining reward halving. May 2020 has been jotted down as an important date for the Bitcoin ecosystem with many predicting that this event will be the catalyst for renewed price action.
There are some, however, have predicted that there is too much hype around the upcoming halving of Bitcoin coming into circulation, and it could well be a non-event. The basis for this halving being important is based on historical readings, as well as fundamental macroeconomics.
But, as to be expected, there are valid arguments for and against this reward halving’s effect, but the latest analysis on the eve of the 100-day countdown, from Weiss, seems to suggest it will be an important factor.
Weiss, the well-known rating agency, has put together information pertaining to how Bitcoin operated over the last two halvings. There is no doubt that following the last halving Bitcoin certainly did rise, as the price before the first say Bitcoin at only $12.
But, the rise in Bitcoin’s price following these events was not as marked, or dramatic, or as easily linked simply to this change, and was rather an ongoing up and down with both bull and bear runs.
During the first event in late November 2012, BTC/USD traded at just $12. Four years later, the supply halved to the current rate of 12.5 BTC per block, and the price was $652.
With Bitcoin gaining over 30% in January alone to hit $9,450, expectations are now higher than ever that the May 2020 halving will produce serious price action a lot closer to $12,000 than $12.
“So, does the Bitcoin halving help drive prices higher? Absolutely,” Weiss said on Twitter.
More than one reason
Bitcoin’s growth in January alone has many feeling that the coin is set for a big boom leading up to the halving, and afterwards. Of course, part of the reason may be the havling being priced in as investors and miners scurry to gather as much Bitcoin as they can before circulation slows.
However, there are a number of other factors that are at play when determining the price of Bitcoin. Bitcoin has been benefiting from critical issues at the global financial level, such as the fear of an upcoming recession. In fact, there are suggestions that Bitcoin might be the safe-haven asset of any upcoming financial crisis.