This halving will still bring about a bull market as in the past. Of course, this bull market will not bring the overall market value of digital currency to the size of the stock market, nor will it let bitcoin popularize to the public and participate in it. So if there is a market for this halving, what might it be?
Let’s first review the last half cut in 2016.
The last time bitcoin was halved was in July 2016. Between July and December 2016, bitcoin hovered between us $500 and US $700 for a long time. That is to say, in the year when the halving took place, the halving effect did not occur immediately.
But in the next year, bitcoin began to rise all the way in 2017, reaching a maximum of about $20000 in December 2017.
Why is that? I think a very important reason is the speculative frenzy caused by Ethereum’s ICO, which has led to the admission of funds from outside the circle. After the admission of speculative funds outside the circle, they not only crazily pursued various ICO projects, but also formed a big bull market.
Rome wasn’t built in a day. The ICO frenzy of Ethereum did not suddenly appear in 2017, but gradually developed from 2016. When its wealth effect begins to attract the attention of off-site funds, it will cause a surge.
Let’s take a look at bitcoin halving in 2012:
In 2012, bitcoin halved in November. However, during November of that year and July of 2013, bitcoin hovered within $100 for a long time, that is to say, it did not rise because of the halving effect after half a year.
It was not until October 2013 that bitcoin began to rise all the way from $200, reaching a maximum of more than $1000 in December 2013.
Comparing the two bull markets, there are two rules
First, the halving effect does not occur immediately after a period of time. At least half a year after the two cuts, the real sharp rise began.
Second, if there is only one factor of halving and there is no other factors associated with stimulation, the halving effect will have but not strong.
In the second half, the stimulus brought by Ethereum ICO made bitcoin rise from less than $1000 to $20000, at least 20 times; For the first time, bitcoin was halved by itself, which only increased bitcoin from $100 to $1000, a 10 fold increase.
In addition, if half cycle is to produce effect, there must be fuse. From this point of view, the fuse with the second reduction of half is very obvious, namely ICO; And the first half of the fuse may be the low price of bitcoin and price fluctuations caused by outsiders speculative capital curiosity. Bitcoin of about $100 can control the price with a little capital. Once the speculative effect reaches a certain level, it will drive the follow-up funds to enter the market continuously, thus forming a bull market.
How will the halving be performed this time? History will not be repeated simply, but there are always rules to follow.
1. Look at the fuse of the halving effect first.
In the face of the upcoming halving, so far, I have not seen a fuse similar to ICO in 2017, except for the halving factor.
Therefore, if we judge by the factor of halving, we can only compare the market in 2013. But the difference between this time and 2013 is that at that time, bitcoin was only $100, but now bitcoin is $10000, which is not comparable in size and capital.
At present, there is no convenient channel for large external funds to freely enter and leave the market. I think the halving effect, if any, will not be very strong.
So is it possible that there will still be a fuse from other fields like ICO in 2017? Maybe in some fields or applications, a single spark will start a prairie fire, but most people haven’t noticed.
It will take some time for this fuse to grow to a certain scale to attract large-scale outside circle funds again.
But I estimate that even if there is, it may be next year at the earliest, but it is unlikely to be this year, because there is not enough time.
2. How much will bitcoin increase this time?
If there is only one factor in this bull market, it is likely that this bull market will only be a wave of small bull market, and it is impossible to walk out of the big bull market like 2017.
In this case, the price of bitcoin may not be too high, and it is conservatively estimated to be between $20000 and $50000.
If this bull market is accompanied by phenomenal technologies or applications in the industry, the increase may be more optimistic.
Editor in charge: CT