Expert’s analysis on CNBC has predicted the price of bitcoin to touch as high as $55,000 by May of 2020.
In a bitcoin analysis that went live on CNBC Sqwaks Monday, professional bitcoin analysts have agreed that the price of bitcoin will shoot up the charts by around mid-2020. According to the report, this was an expected result ahead of the May 2020 bitcoin inning rewards halving which is expected to be implemented at the time.
Over the years, bitcoin mining rewards have been generated by miners who had to solve complex mathematical computations in which bitcoin transactions are confirmed and added to the blockchain. When such transactions are successfully confirmed and added to the decentralized ledger, the miner to perform such actions first get a reward in newly minted BTC which is then added to the circulating supply of the digital currency.
What Is “Halving”?
At the first instance, the mining reward was set at 50 BTC after which the figure changes to 25 BTC when the first 210,000 blocks were added to the bitcoin blockchain. This then repeats itself after the next 210,000 blocks added to the network and it takes approximately 4 years to complete.
As it is right now, the block reward is 12.5 BTC and this figure is expected to be halved when the next 210,000 blocks join the blockchain around May 2020. As we look at 6.25 BTC block rewards next year, BTC holders are particularly careful about their coins and speculate that scarcity of the coin brought about by lower mining rewards would mean a higher price after the halving takes place next year.
History Of Halving And Price Action
Halving has always affected the price of bitcoin over the years. When the first halving took place on November 2012, BTC moved up steadily from $11 to $1,100 through 2013. Although the price later crashed to about $200 within the next year, it remained at that level for a few more years.
Similarly, on July 2016, the next halving occurred in which bitcoin slowly rose from around $580 to $20k around 2017. As the culture is, the price crashed again in 2018 and now, BTC trades at around $9,400.
Optimism Around The Next Halving
Invariably, the next halving might follow the same pattern of price surge and corresponding crash but in 2020, many are too optimistic to believe bitcoin will behave differently this time around.