The halving is a major event and was included in the Bitcoin source code from the start. This is the main element of inflation control and the biggest impact on the price of the 21 million bitcoins issued.
On the Genesis block, miners received 50 BTC as a reward in 2009. This was already reduced to 25 BTC in 2012 and again to 12.5 BTC in 2016 and to 6.25 in 2020.
After the halving The price rose from $ 12 in November 2012 to a high of $ 1,100 in November 2013. Likewise the second halving 11 months later, the price soared from $ 650 in July 2016 to over $ 2,500 in May 2017.
The most straightforward interpretation of this is that the halving introduces a supply restriction, driving demand, always between 200 days and 16 months.
In the price rise of the first halving, We saw a 37x increase from $ 31.50 to $ 1,178. From the 2nd to 3rd halving, we saw a 16-fold increase from $ 1,178 to $ 19,800.
Price development after halving
The Bitcoin rally after the 2016 halving started 2 months after the event. This year, after halving on May 11, 2020, the price of Bitcoin fell, followed by an unusually stagnant volatility that lasted 30 days.
On July 28th, approximately 2 months after the halving, Bitcoin price exceeded $ 11,000 for the first time in 349 days. At the time this article was written, Bitcoin was hovering around $ 11,712, up 36.1% since the miners commission cut.
Image: In the block
With the price of Bitcoin finally breaking the $ 10,000 mark for the first time since September 2019, it is not surprising that people want to invest in Bitcoin.
We are on a rally, according to the data
According to a recent report released by Glassnode, Glassnode added that every time the profitability of the UTXO metric, which looks at Bitcoin’s unspent inventory, exceeds 95%. We are facing a recovery that could take up to 3 months. Information also analyzed by IntoTheBlock confirming the same expectation as we can see in the graph below.
As can be seen from the graphic above, the number of addresses with a retention period of less than 30 days is the Classified as a “Merchant”, IntoTheBlock has risen over the past two months, hitting a 12-month high of 3.18 million addresses for a total of 1.94 million BTC.
Greater institutional interest in contrast to the other halves
Together with rising prices and the new flow of money to Bitcoin, the on-chain data supports the premise of the growing attractiveness of Bitcoin among institutional investors. In contrast to previous halving, which does not yet need to attract institutional attention.
Renowned hedge fund manager Paul Tudor Jones announced its investment in Bitcoin earlier this year. Recently, a publicly traded software company like MicroStrategy invested $ 250 million in Bitcoin and described it as superior to cash.
The total transaction volume over $ 100,000 reached 2.81 million BTC or $ 34.05 billion traded in 24 hours, the highest since August 2019. If you compare the total volume traded in Bitcoins to the total volume traded only in large stores (> $ 100,000 USD) on August 14, you can see that 95.5% of the total volume belonged to those large stores.