A major event in the Bitcoin timeline is scheduled more than six months out, but the number of articles already speculating the consequences is growing in geometric terms. The word “halving” will soon find its way into our daily lexicon, if it has not already, but Bitcoin enthusiasts are well acquainted with what will happen in May of next year. The rewards to miners will be cut in half, thereby creating less supply, and, hopefully, the expanding demand for the world’s favorite digital asset will shoot prices to the moon.
We have written about this event on several occasions, as far back as last August, but it seems to be a popular topic these days. As we reported in August: “For those that missed the email, a “halving” event occurs every four years for Bitcoin. During its first four years of existence, 50 bitcoins were issued every ten minutes, a mining “reward”, so to speak. Every four years, this amount is cut in half, which has earned the name of a “halving event”. As of 17 May 2020, the mining reward will be cut in half again, from its present amount of 12.5, down to 6.25.”
Your first reaction may be that miners will lose out, due to this programmed cut in their revenues, but you need not shed many tears on their behalf. If you do the math, i.e., 6.25X6X24X365X$9,200, then the potential funds on the table for miners on an annual basis comes out somewhere just above $3 billion, based on today’s prices. But what about prices going to the moon? The Bitcoin faithful usually swear by this chart: