Bitcoin in 2k20: ace Moon or as usual?
Tuzemun Bitcoin has been prophesied for more than a year and every coin holder desperately expects that one fine morning the main cryptocurrency will make several X's and continue its endless growth. Finally, there was a good reason to wait for the fulfillment of this cherished dream and it is called bitcoin halving. What is this and whether this event is really capable of pushing the cue ball course - we will understand this article.
What is halving?
In the world of fiat money, the exchange rate, as well as their amount on the market, depends on the desire of the Central Bank. He can mint paper wrappers at his discretion, he can seize them and use other tools to adjust the price of a particular currency. In the world of cryptocurrencies, there are neither Central banks, nor instruments of influence on free and fair money, and the exchange rate of most coins depends on the real demand for cryptocurrency and the issue of funds.
In the case of Bitcoin, the issue of coins is limited in advance and amounts to 21 million. BTC. This entire volume of cryptocurrency was not minted at once - coins appear through complex mathematical calculations. In order to receive a reward in the form of coin mining, a miner needs to have more computing power and generate a new block. Such a block is formed every 10 minutes, but mining has its own difficulties. For example, after mining every 210000 blocks, which take about 4 years, the reward for generating a block is halved. Due to this, the number of coins issued is reduced - this phenomenon is called "halving».
The first halving occurred in 2012 - if initially the remuneration for mining the block was 50 MTC, then after the first halving it was reduced to 25 MTC. The next reduction in bitcoin emissions occurred in 2016, as a result of which the miners began to receive 12.5 MTC for their calculations. Now we are on the verge of another halving, which is expected to happen in May 2020. This reduction in remuneration for the block will lead to the fact that miners will receive 6.25 MTC for their work.
The emission reduction will not stop there and stably, every 4 years, miners will receive less and less coins. The last such cut will occur in 2138, the reward will decrease to 0,0000000058 MTC. Only 2 years after this event, the last bitcoin will be mined - the issue of coins and rewards for blocks will be stopped. Nevertheless, the miners will not be left without their earnings and will continue to receive money in the form of a commission for confirming operations.
Why and who needs halving? This is a tool that allows you to limit the release of coins and create their deficit in the market. 130-year production of military-technical cooperation with a gradual decrease in their production should theoretically have a positive effect on the rate of the main cryptocurrency. But this is more likely a byproduct that Satoshi Nakamoto did not consciously pawn - his bitcoin was supposed to be money for the poor, and not a tool for speculation.
Since halving is pre-planned, cryptocurrency users know in advance when it is supposed to happen. As a result of this, many questions arise: whether the coin will grow after the next emission reduction, how investors will behave before halving and what will be the forecast for the course in the next few years. These questions can be answered if we analyze the behavior of Bitcoin throughout its history, for which he already managed to go through a halving twice.
Technical analysis allows you to find out that the course chart of any asset works in cycles, that is, is periodically repeated. This can be attributed to both stock markets and foreign exchange, and, in principle, to many economic models. After any rapid growth follows a depreciation and the achievement of a kind of bottom, after which the trend changes to growing with the peak.
Four economic cycles, which were named in honor of the economists who discovered them, are most famous. Each of the cycles has its own characteristics and lasts for a certain period: the Kitsch cycle (up to 4 years), the Jughlar (up to 11 years), the Kuznets (up to 25 years) and the Kondratiev cycle (up to 60 years). For obvious reasons, we have not been able to observe most of these cycles on the example of bitcoin, but with respect to the shortest of them, an interesting pattern is emerging.
Kitsch cycle - short-term periods in the economy, limited to a period of 2-4 years. The economist associated the economic fluctuations with the peculiarities of gold mining, which is consistent with Bitcoin, which is also mined with a certain decrease in volumes every 4 years. Actually, the Kitsch cycle fits very well in the period between halvings of the cue ball.
The history of the bikoin rate allows us to trace that before each emission reduction and after it, the price of the coin behaved the same way. Initially, price dynamics showed growth, reaching a peak, then followed by a recession, after which the bottom came. Then the coin managed to approach its average value before the next halving came.
The Bitcoin cycle begins with active growth, which allows the coin to reach peak levels. At the very top of the course, the so-called “descending triangle” begins, but in some places the price bounces several times, not reaching the bottom, which nevertheless becomes inevitable in this downward movement. This is followed by a period of price formation at average levels, and until the onset of halving, the course moves in different directions, but does not make significant leaps. After reducing the size of bitcoin mining, the rate begins to gradually go up, reaching a new peak.
What happened to the Bitcoin exchange rate from 2011 to 2013?
It's no secret that since the start of Bitcoin, its price has long been at fairly low levels and the first peak was reached only in 2011. Then the coin rose in price to $ 32 per 1 MTC, but did not last long at this mark and almost immediately the course went down. It was a real collapse in value, and it happened according to the “descending triangle” model. The fall was rapid and the support level was $ 8. Having broken this indicator, the price rushed to the bottom, which became for Bitcoin valuable at $ 2. After that, the movement went up and the cue ball managed to reach almost half the path to the peak - the coin was quoted at $ 15. Halving was not far off and the course was moving down and up. When in November 2012 the emission of bitcoin was cut, the price of cryptocurrency was $ 12.25. Further, active growth began and a new peak was reached.
Bitcoin from 2013 to 2016
From the winter of 2013 to the summer of 2016, the bitcoin market experienced almost the same picture that I described above. From the very top, the cryptocurrency fell into the “descending triangle”, then reached the average value, at which it practically retained its potential until the halving. The peak in this period was the price of $ 1177, and the bottom was fixed at around $ 163. At the time of the halving, the cue ball was a little over $ 660, and it took almost 17 months to reach the new peak.
Course from 2017 to 2020
The peak of bitcoin in 2017 was the most famous and still excites the minds of speculators, investors and crypto enthusiasts. Then the coin managed to show an incredible take-off to the space $ 19794 for 1 MTC. But to amuse themselves with such prices for the main cryptocurrency was not a long time, and, as we all know, a sharp drop followed, which reached the very bottom at around $ 3148. Observing the behavior of the coin in recent years, it was possible to observe the achievement of a median value of $ 13800. Based on the previous cycles of bitcoin, we can assume that by the time of halving the price will be quoted at about $ 12000 per 1 MTC.
Price and halving
Previous Bitcoin cycles show that at the time of halving, the price of this asset differs by 9-10% from the value that was observed at the time of recovery to the average level after the peak. Simple calculations confirm all these assumptions:
- In 2012, the average course after recovery was $ 15, while the peak was at $ 32. That is, after falling to the bottom, the coin was able to gain a little more than 46,8% of its peak value. At the time of halving, a rate of $ 12 was fixed, which is about 37.5% of the highest cost. There is a 9.3% difference between these numbers.
- In 2016, the MTC recovered to $ 784, that is, it reached only 66,6% of the peak price, which amounted to $ 1177 in this cycle. At the time of cutting bitcoin emissions, the cost was fixed at around $ 665, that is, 56.5% of the peak. We have a difference between the average price and the day of halving in the amount of 10.1%.
- According to this logic, considering the middle of the current cycle a value of $ 13830, we can assume that when recovering the coin reached 69.86% of the previous peak. It can be predicted that at the time of halving the cost will be about 59-60%, which in dollar terms will amount to $ 11800-12000.
What will be the growth of bitcoin in 2020?
The cyclicity of the Bitcoin exchange rate is obvious and, taking the calculations described above as a forecast model, we can assume how the main cryptocurrency will behave this year. But for this you need to perform some more operations:
- In 2010, the MTC peaked at $ 0.5.
- The next peak was at 64 times more - 32 $.
- Then the coin showed a peak value of $ 1177 and this in 8 times larger than the previous peak.
- The last peak was $ 19794, which is more than the previously reached peak at 8 time.
It is not difficult to notice that with each peak the multiplicity of price growth, compared with the previous top, is almost halved. To find out the ratio between the peaks, we can carry out the following calculation:
- 64 / 36.8 = 1.74
- 8 / 16.8 = 2.19
The average ratio is 1,965 (1.74 + 2.19): 2). That is, if we had the last coefficient in the amount of 16.8, and the next one will be less in 1.965, we can assume that the cue ball will reach a peak of x8.55 from the sum of the previous take-off. By simply multiplying the coefficient by the previous peak cryptocurrency rate, we get a figure in 169238$. Thus, our cyclic calculations allowed us to find out that, logically, the next rise in bitcoin can reach cosmic significance in 169 thousand dollars!
The experience of previous years shows that the price of a coin begins to rise almost immediately after a halving. This movement does not occur swiftly, but very gradually, with course corrections that can drag on for several weeks. If you believe such calculations, then by the end of 2020, you can expect that Bitcoin will be able to surpass the previous maximum, and a new peak can be reached by the end of 2021.