On July 9th, 2016, the reward for the mined block went from 25 BTC to 12.5 BTC. The next halving is expected for May 23rd, 2020, approximately.
July 9th marks the third anniversary of Bitcoin’s second halving, which led to the reduction of the rewards obtained by the miners of the network to 12.5 BTC for each mined block.
Halvings occur every 210,000 mined blocks (approximately every four years), had said Satoshi Nakamoto. Only two reward reductions have occurred during Bitcoin’s history: first in 2012 and then in 2016. A third event is expected on May 23rd, 2020, on block 630,000.
Regarding the 2016 halving, cryptocurrency holders focused their expectations mainly on the incidences of the reduction in the price of the crypto asset. As a result, bitcoiners expressed their concern and expected a price increase prior to the event and prepared for a subsequent fall.
It is worth remembering that when the second reduction of the reward occurred, the ecosystem did not have its current level of maturity. The relationship of the cryptocurrency market with traditional entities and regulated companies was lower. However, bitcoiners had the previous experience of a first halving, which occurred on November 28th, 2012. At the end of that year the price reached more than 13 dollars.
According to Buy Bitcoin Worldwide records, the price started to rise in July 2012, when it exceeded US $10 per unit. The bullish trend increased after the reward for mining was reduced from 50 BTC to 25 BTC. After this halving, Bitcoin initiated one of its most important escalations, where it managed to break the US $100 barrier.
When evaluating Bitcoin’s historical price charts in the months before and after July 2016, it is observed that the impact of halving on Bitcoin’s value was not as immediate as expected. Even so, the changes in the movement of prices were noticeable about one month before and one month after the date estimated for the reduction.
As shown in CoinMarketCap statistics, Bitcoin’s value began rising approximately in May 2016, when it was pricing at US $449, approximately. The price reached a peak of over US $700 in June, but then it started falling, ranging between US $600 and US $700, thus being around US $650 on July 9th.
After the halving in 2016, Bitcoin remained fluctuating between US $600 and US $700, with a drop that reached US $560 in August. In the following months it began rising gradually until it reached over US $900 in December.
Beginning of a New Stage
The contexts in which these two reductions occurred were different. In 2012, Bitcoin was not very attractive and the only interesting market was developed in the Silk Road illegal goods purchase portal, hosted on Deep Web. However, in 2016 the cryptocurrency gained some importance in the financial markets, but not at the current levels.
For these reasons, the second Bitcoin halving was received with greater expectation, uncertainty and curiosity, by both bitcoiners and novices. The event marked a new stage in the ecosystem, which has led the cryptocurrency’s growth and advance in the market to significant levels.
The Bitcoin charts show that the halving that took place in 2016 preceded the bullish rally of 2017. After that, the cryptocurrency reached its historical maximum in December 2017, almost reaching the US $20,000.
BY Willmen Blanco
