No one knows if the halving that will occur roughly May 2020 will impact the price of Bitcoin. However historic correlations with halving and price are notable.
Also, logically as less Bitcoin can be created as rewards from mining new blocks, there is natural pressure on the market to value Bitcoin at a higher price.
TIP: You can see a price chart since 2011 with Bitcoin halving dates on it at ihodl.com.
Here is what you need to know:
- Bitcoin halving describes a set part of the Bitcoin code that dictates block rewards to be cut in half every 4 years.
- In uptrends have followed halving events. However, there is no rule that history has to repeat.
- On reason to think that a halving event may act as a prelude to a Bitcoin run is that miners will suddenly get 1/2 the amount of Bitcoin as a block reward. This means they will either have to raise the minimum fees they accept (meaning people would need to include higher fees with their transactions), or the price would have to double for miners to make the same amount mining they did before the halving. However, there is no rule that miners have to be profitable or can’t make up for a lack of profit with transaction fees.
For a in depth look at halving and price, see Forbe’s “A Bitcoin Halvening Is Two Years Away — Here’s What’ll Happen To The Bitcoin Price.”
UPDATE 2020: Below is an updated look at the Bitcoin halving chart going into the 2020 havling.
TIP: Although many cryptos use unique mechanisms to ensure scarcity, Bitcoin isn’t the only coin that “halves.” Litecoin and other cryptos created in image of Bitcoin tend to use this same mechanism.
"Will Halving Affect the Price of Bitcoin?" contains information about the following Cryptocurrencies: