The concept of the mass adoption of Bitcoin has been around for a very long time. Whereas some crypto users believe it is a possibility, some others think it is just a fallacy. The upcoming event of the Bitcoin halving in 2020 has once again raised this debate. This event is expected to give rise to new Bitcoin millionaires.
However, cryptocurrency experts are looking at how it could be a significant stepping stone to the mass adoption of the cryptocurrency. This will be discussed in this post to find out what conclusions can be drawn.
What Is Bitcoin Halving?
Basically, Bitcoin miners use sophisticated equipment to mine and release new Bitcoins (block rewards) into the blockchain. Currently, the amount of Bitcoins released into circulation every ten minutes is 12.5. The Bitcoin halving event will be dividing this amount into two, and after then, only 6.25 Bitcoins will be released into circulation every ten minutes.
By May 2020, the next Bitcoin halving will take place. It will affect the coin price and also prompt Bitcoin miners to evolve.
This is not the first time such an event is happening, as it happens every four years. Literally, Bitcoin is halved after every 210,000 blocks, and this is presumed to be completed within four years. Bitcoin has been halved twice in the past and will still be halved in the coming years.
When Bitcoin was introduced in 2009, 50 coins were released every 10 minutes; this was first halved to 25 coins and then later 12.5. The reason for this is that the total amount of Bitcoins that can exist as specified by Satoshi Nakamoto is 21 million, so the limit-reach can be delayed.
How Will Bitcoin Halving Affect The Bitcoin Price?
When the supply of Bitcoin is halved, it means that there will be fewer Bitcoins to circulate. It is a typical trend that when supply is limited, and demand is high, the price of a commodity will appreciate. The commodity here is Bitcoin, and so long as the Bitcoin demand remains the same, the price will surely increase. In the same vein, the crypto market response to the halving season can even lead to an increased demand.
If this happens, current holders of Bitcoin will have the privilege of selling high above the purchase price and thus make a considerable profit. It won’t be wrong to say that such a breakthrough for crypto holders would make more people interested in using Bitcoin i.e. mass adoption. However, this is not 100% certain, and no one is entirely sure of what will happen. What is certain for now is that the Bitcoin halving event will lead to increased volatility on the market and in the trading hubs like London, Hong Kong or Singapore, Bitcoin is most likely going to one of the most traded assets at that moment. According to TradingBeasts IQ Option Singapore Review, traders from Singapore can trade Bitcoin with up to 1:100 leverage and with the increased volatility caused by the Bitcoin event, which could bring a lot of interesting trading opportunities.
Is Mass Adoption Possible After The Next Bitcoin Halving?
To predict the outcome of the upcoming Bitcoin halving, we should firstly consider the result of the previous halving events.
As earlier mentioned, 50 Bitcoins were released by miners every 10 minutes until the first halving in 2012. Within the first year of the halving, the Bitcoin price massively increased from about $12 to $1,100. The next halving in 2016 saw a massive increase from about $650 to about $2,500 in about a year and a half.
With this, it is clear that the Bitcoin halving does increase the price as supply is cut short while demand goes up. In 2020, Bitcoin is trading at over $8,000, which is a vast difference from the cost since the second halving. However, the Bitcoin price has always been volatile and can be affected by any instance. Moreover, the crypto industry saw Bitcoin trading below $4,000 in the same 2020.
If the Bitcoin halving skyrockets the Bitcoin price, experienced crypto traders are learned enough to know that the price can still fall back. Therefore, for Bitcoin to be mass adopted, more than halving should be done.
It is uncertain whether the next Bitcoin halving will lead to mass adoption or not. However, the previous success of the last two Bitcoin halvings can be relied upon.
Before mass adoption can be achieved, it is essential that Bitcoin transactions should be confirmed faster. For instance, banks in the financial industries verify transactions in minutes. On the other hand, Bitcoin transactions can take minutes, hours, or even days to be confirmed based on the transaction or miner fee.
Additionally, transaction fees should be reduced, while the mining process should be more decentralized just like the blockchain. That way, more people will adopt Bitcoin as their preferred digital currency.