4 Bitcoin halving predictions: $20k, $55k, $140k?

20 Jun, 2019
by Will Heasman
Bitcoin
4 Bitcoin halving predictions: $20k, $55k, $140k?

336 days, 2 hours, 49 minutes and 35 seconds, that exactly how long we have until the next Bitcoin halving (at the time of writing, of course). With less than a year to go Bitcoin is already showing signs of lift-off, but what will its trajectory be? Here are 4 predictions for the 2020 Bitcoin halving…

Every single time Bitcoin (BTC) moves up even a single dollar in price, someone attributes it to the 2020 halving. But who could blame them? Right now Bitcoin is at the peak of a 13th month high, marking a 145% year to date increase, and appears to be edging towards 5 figures. But does this really have something to do with the upcoming Bitcoin halving?

Bitcoin halving?

On 31 October 2008, the enigma known as Satoshi Nakamoto, published the Bitcoin whitepaper. This now sacred document lays the fundamental principles of BTC - its ins, its outs, how it works, why, and for what purpose.

One of these principles included the necessity to control Bitcoin’s supply, not like as we do with fiat which is controlled through arbitrary monetary policy often created under the whims of a collective, but via a precise mathematical methodology which would ensure inflation is kept under control, and the circulating supply is limited.

To do so, Nakamoto imposed the requirement to half the mining reward for every 210,000 blocks mined (approximately every four years) until all blocks are mined. This process is known as the Bitcoin halving.

Supply = demand

One of the main reasons for the increase in speculation surrounding Bitcoins price post halving is the idea of supply and demand. Bitcoin has already gone through 2 reward halvings so far; the first reduced its mining reward from 50 BTC per block mined to 25 BTC, the second from 25 to 12.5 after the next halving in May 2020 this reward will get reduced to 6.25 BTC per block.

Previous halving events have provided some major price boosts for Bitcoin, for example, Bitcoin's price one year before the first halving was $2.55, one year after it was $1037. Similarly, the price before the 2nd halving was $268, and after it stood at $2,525. 

Predictions:

Given both the simple principle of supply and demand and the historical effects upon price action, a few analysts have tried their hand at auguring the price of Bitcoin leading up to and following the halving event.

1) Plan B: $55,000

Let’s kick things off with the aptly named analyst and crypto Twitter sensation, Plan B. This pseudonymous speculator put Bitcoin’s price at $55,000 post halving, basing the valuation on Bitcoin’s stock-to-flow (SF) ratio - the relationship between an asset's circulating supply and its inflation.

Within a highly detailed post, Plan B painstakingly explains how Bitcoin currently has an SF of 25, which roughly equates to BTC taking 25 years at its current rate of supply to duplicate its current circulating supply of roughly 17.7 million BTC.

As a comparison gold has an SF of 62, typically the high the SF the higher the market value of an asset. Here’s the kicker, Bitcoin’s SF is set to double to 50 after its halving – a figure etching ever closer to that of gold’s. Lower rate of supply = higher SF, higher SF = more scarcity, scarcity = value.

The analyst predicted a market cap of around $1 trillion for BTC post halving, giving credence to the aforementioned $55k per BTC valuation.

As for where this influx of capital will come from? The analyst has that covered as well:

“silver, gold, countries with negative interest rate (Europe, Japan, US soon), countries with predatory governments (Venezuela, China, Iran, Turkey etc), billionaires and millionaires hedging against quantitative easing (QE), and institutional investors discovering the best performing asset of last 10 yrs.”

     

2) Moon Overlord: ???

Another pseudonymous (could you guess?) analyst and trader by the name of Moon Overlord looking to the potential upside of the upcoming bitcoin halving, and while they didn’t give an actual price prediction per se, they did allude to a bullish amount of price action following the May 2020 date.

The analyst noted back in January of this year that Bitcoin typically starts pumping approximately 1 year before its halving date, noting that this pump would occur in May 2019.

To be fair, the analyst was almost bang on, in fact, their analysis was only off by a month as Bitcoins started pumping at the beginning of April, making the start of its impressive 2019 rally with that initial $1000 candle which saw BTC blast past stubborn resistance at $6k.

Based on the rough impression of the analyst’s chart, Bitcoin could be expected to - at the very least - break through its previous high of $20k.

  

3) A Reddit user by the name of lemonmule: $140,000

Okay so this might seem like we’re really scraping the bottom of the barrel with this one, but hear us out…

So this guy might not have a following on Twitter, but he does have quite a funky pseudonym. Either way, this unknown analyst simply dumped a BTC chart within the Cryptocurrency SubReddit, with the caption: “I drew some lines on this graph with 0 analysis.”

The graph lays out the several phases running up to a halving, phases which include a bull market, bear market, an accumulation, expansion, and reaccumulation before circling around to a bull market once again. 

Regardless of the fairly optimistically drawn latter bull market phase, the chart does quite nicely lay out the 5 distinct stages of previous cycles leading up to a halving event. Furthermore, the chart alludes to the fact that BTC is about to enter the reaccumulation zone before the 2020 Bitcoin halving which would take us – as with previous years – into a fully fledged bull market; with an apparent upside of >$140k.

   

4) Canaccord Genuity: A return to all-time highs ($20,000) 

Within a research note published back in May, several analysts from Investment bank, Canaccord Genuity, suggested that Bitcoin would revisit its monolithic highs reached back in December 2017 between now and the Bitcoin halving event.

The analysis notes the “striking similarity” in Bitcoin’s price action trends between 2011-2015 and 2015-2019. The research also notes that Bitcoin operates on a four-year cycle, coinciding with its halvings:

“Looking ahead, if Bitcoin were to continue following the same trend, the implication is a slow climb back toward its all-time high of ~$20,000, theoretically reaching that level in March 2021,” reads the note. 

What’s your prediction for Bitcoin’s price post-2020 halving? Let us know in the comments!

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