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- Crypto experts are currently still divided on whether the Bitcoin price will rise or fall after the halving in May.
- There is no common consensus within the Bitcoin community as to whether BTC halving is already priced in or whether there will be a significant price movement.
Hardly any other event has attracted as much attention on the crypto market in recent times as the Bitcoin halving, which is scheduled for May. The reward per block mined will be halved from 12.5 to 6.25 Bitcoins, so Bitcoin miners can expect a sharp drop in revenue after this date. Despite a fundamentally bullish market sentiment, the Bitcoin price before halving continues to trend sideways.
Will the Bitcoin price rise or fall after the halving?
In the week of May 18th, at Block 630,000, the mining reward will be reduced again. Crypto News Flash already reported in mid-March that some experts assume that the BTC price will not show any significant movement and that the Bitcoin halving is already priced in. However, there are also enough other expert opinions that consider the halving a bullish event.
James Todaro, head of research at TradeBlock, predicts a price increase for BTC:
Following the #bitcoin halving, miners’ estimated breakeven costs will rise from ~$7,000 today to ~$12,000-15,000 per $BTC after. I would not be surprised if we see bitcoin prices rise above these levels so that miners remain profitable.
The analyst “PlanB”, who introduced the stock-to-flow model for predicting the Bitcoin price, describes that Bitcoin needs a monthly capital inflow of at least $400 million per month to achieve a rising BTC price in the long term:
To maintain $7000 since Oct 2017, #bitcoin must have had about $400M new cash inflow every month last 2.5 years! (30d x 24h x 6blocks x 12.5btc x $7k assuming all trading is zero sum game). After the halving, we only need $200M per month to keep $7k level. If $400M stays, then.
The Bitcoin exchange Binance has also dealt with the Bitcoin halving in detail, but found that the halving is already priced in:
(…) the Bitcoin halving event of 2020 can’t be compared to the previous halving events, due to several factors, such as increasing market maturity and better halving anticipation in the crypto community, as well as the possibility that the impact of halving is already priced into the current BTC prices.
Melem Demiros of Coinshares shares this opinion. In her opinion, this year’s halving differs from the BTC halvings of the last few years, as the market is more mature and has grown further. The data analysis company Skew concludes that either the BTC options market has already priced in the halving or the market itself is highly inefficient.
8/ This does not make sense in the context of alleged increased volatility expectations for the halving itself: one would expect to see a higher forward volatility for Q2 2020 vs the rest of the forward vol curve if the options market actually anticipated turmoil for this event.
— skew (@skewdotcom) January 6, 2020
Salah-Eddine Bouhmidi, financial market analyst at DailyFX, describes that the halving will have a positive impact on Bitcoin and BTC will reach new highs, but not yet this year. She believes it is realistic that Bitcoin can rise to $14,000 by the end of 2021.
The CEO of the exchange Bitfinex also thinks that BTC will rise strongly in price after the halving. In his opinion, before FUD (Fear of missing out) will cause many investors to enter the market just before the halving. As a result, he believes that fresh capital could push the BTC price above $20,000 by the end of the year.
The Bitcoin bull and founder of Fundstrat Tom Lee also describes that BTC’s halving will have a significant effect and Bitcoin could reach a new all-time high before the end of the year:
Bitcoin price is around $10K now, and if this [Bitcoin halving] is going to play out like the other halving periods, there’s a good argument that Bitcoin makes an all-time high this year.
Adam Back, CEO of Blockstream, believes Bitcoin’s fundamentals are promising and expects BTC’s price to reach $20,000 by the end of the year as the effects of the halving and the further development of the technology will bring Bitcoin further into the mainstream. Marc P. Bernegger, Fintech Investor at Crypto Finance, shares Back’s opinion and describes that the macroeconomic situation and the halving will be a strong catalyst for the BTC price.
Accurate prediction of the halving influence on the BTC price impossible
The opinions show that there are both bullish and bearish views that the halving could affect the Bitcoin price positively or not significantly. Overall, however, there are more bullish opinions forecasting a rising price of BTC. Nevertheless, it should be noted that the forecasts presented may also be driven by own interests. Every investor or CEO pursues a goal and accordingly has a wish for the further price development of Bitcoin.
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