What is going to happen in the upcoming Bitcoin halving? Will the price increase further?

in blurt-131416 •  9 months ago 

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Report published by Prothom Alo Trade Desk

image.png Bitcoin Image: Reuters.Source

But what is the matter of having? Is this something to consider? This analysis is based on information obtained from news agency Reuters and various sources.

Bitcoin price rises to record highs. Along with that news, many are now turning their attention to the upcoming halving. This means that after a few days the production of Bitcoin will decrease. And that's why speculation has started whether the price of Bitcoin is increasing or not.

"Having" is a very important event in Bitcoin. According to the laws of economics, when the supply of a product that is in demand in the market decreases, the price increases. The question now is, will the price increase further in anticipation of a reduction in production and supply of Bitcoin, or will this be merely a technical matter? Now there is talk about whether market speculators are taking advantage of this situation or not.

What is having?

Blockchain technology is behind Bitcoin. This technology is modified by havling. The aim is to slow down the rate at which bitcoins are produced. That is, reducing the production of Bitcoin.

Bitcoin was designed by a man named Satoshi Nakamoto. This is his nickname. He is the creator of Bitcoin. Satoshi Nakamoto decided that a maximum of 20 million bitcoins could be created. Nakamoto also wrote the code for having. As determined, the creation of new bitcoins will gradually decrease.
So far 1 crore 90 lakh bitcoins have come into the market.

How does it happen?

A record of information is created in blockchain technology. These are known as 'blocks'. And the process of adding these blocks to the chain is known as 'mining'.

Blockchain is created by solving all the complex numbers. Miners use their computing power to do this. And as a reward they get new bitcoins. But when the halving happens, the reward amount for miners is halved. This results in lower mining profits than before, as well as slowing down the production of new bitcoins.

It may be explained in this way: Suppose you hire two people to work at home and you pay them money or some other exchange currency. That's exactly the process used here. Those who mine are rewarded with Bitcoins.

Satoshi Nakamoto made two rules for how that prize would be awarded. The first rule is that there cannot be more than 21 million or 21 million bitcoins in the world. That is, no one can make more bitcoins.

The second rule is that when 2 lakh 10 thousand blocks are created, the reward amount will be halved. That is, then hawing will be done.

When is the next havin'?

There is no fixed date for this. But it is expected that the next halving will be in the month of April. It has been found that it takes roughly four years to join the 210,000 block chain; That's why Bitcoin halving happens every four years.

According to various sources, the first bitcoin halving took place in 2012; The reward for each block is then reduced from 50 bitcoins to 25 bitcoins. Then the second halving was done in 2016. The prize was then further reduced to 12 and a half bitcoins. In May 2020 that further reduced to just 6.25 Bitcoins. Analysts believe that the halving, which is going to happen in April, will further reduce the reward to 3.12 bitcoins per block.

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What does price have to do with it?

The reason for capping bitcoins at 21 million is to balance supply and demand in economics. If the supply of Bitcoins was unlimited or Bitcoins could be produced as much as they wanted, with no halving, there would be a lot of Bitcoins flowing into the market. As a result, the price of Bitcoin would not have been so high.

Many analysts and traders say that when there is less supply of Bitcoin in the market, its price increases. However, many miners do not sell their bitcoins. If they had sold more bitcoins, the price might have gone down.

It's really hard to know why the price of Bitcoin goes up. One reason is that there is less transparency in these transactions. It is often not possible to know who is buying and why.

One of the reasons for the recent rise in the price of Bitcoin is the approval of Bitcoin ETFs. The US Securities and Exchange Commission approved bitcoin-based ETFs in January. At the same time, the central bank is expected to cut interest rates.

What happened in the previous havin'

There is no evidence that halving alone caused the price of Bitcoin to rise. But still analysts and people involved in Bitcoin trading try to find a correlation between the price and the halving.

When the last halving took place on May 11, 2020, the price of Bitcoin rose 12 percent in the following week. But at the end of that year, the price of Bitcoin increased a lot. A number of factors were then attributed to changes in monetary policy, increased investment in cryptocurrencies by domestic investors.

In 2016, the price of Bitcoin rose 1.3 percent in the week after the halving. But after a few weeks, the price of this cryptocurrency fell again.

Bitcoin price is now at an all time record high. Bitcoin price is up more than 60 percent since last October; 44 percent increase in February alone.

However, many analysts do not completely rule out the fact that halving is related to the increase in the price of Bitcoin. We can only speculate about what will happen this time. The price of Bitcoin is already high, so it remains to be seen where the price of this virtual currency goes after the April halving.

I think this report is very important, so I made a post with this report. Everyone stay well, stay healthy and prepare for the halving' ahead.
Thanks to all @stmp04

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