Finally, the Bitcoin halving is done and the reward per block is now just 6.25 BTC. Another halving is in 4 years approximately which will reduce the block rewards by half again. There was a lot of hype created because of halving and I have seen people talking about it since last year. This was probably the biggest crypto event of this decade, well, for now at least.
You must be wondering that if it was such a big event, why didn't it have an impact on the price of BTC! Well, let me tell you that the outcome of such an event will not be sudden, it will take time, probably a few months before we can see what really changed because of halving. Let's look at some of the possible effects of Bitcoin halving:
What I really mean by less volatility is that it is possible that we won't see big dumps in price as we were accustomed to see earlier. The reason why I am saying that is that majority of BTC sellers were miners (people who mine BTC for rewards) and with block rewards reduced to half, there won't be as much selling pressure as there used to be before. Less BTC in the hands of miners will mean they won't have huge chunks of Bitcoin to sell which in turn will help in keeping the price of Bitcoin more stable.
I personally love volatility, that what makes the crypto market interesting. The excitement that comes with investing in crypto is huge but some stability will really help in attracting new investors and that's a big positive.
Now, this is what all of us are waiting for and for those who have been in the crypto market before 2017 bull run, the wait has been too long. In the past halving events, big spikes in the price of BTC were achieved only after a few months of the event. In 2016, it took around 8 months for BTC to rise in value significantly. All of you know what followed in 2017. So, I think that we need to be a little more patient with Bitcoin price and I am sure that we will see those gains again after a few months.
What follows BTC bull run? An alt season of course. When Bitcoin rises in price, the investors usually take profit and move towards their favorite altcoins. Given the fact that the market cap of altcoins is significantly lower than BTC, the expected rise in altcoin price can be huge. You could really gain 10x your investment or maybe even more if you have the right altcoin.
Less BTC Miners
Yes, halving is not only about positive things, but there are also some negative impacts as well. Negative in the sense that many small miners will now shut their mining rigs as now, it won't be profitable to mine BTC for them. It is expected that almost 30% of the BTC miners will stop mining immediately after the halving. It means that those people will have to look for some other ways to earn money to make a living.
I heard someone saying that if there are fewer BTC miners, the mining becomes easier and that's probably a good thing for miners. There is also a possibility that the miners who stopped mining will return when the price of Bitcoin rises and the mining becomes profitable for them again.
So these are some of the effects that BTC halving will have. Let me know if I missed something.
I am not a financial advisor. This is personal opinion and is meant for information and entertainment purposes only.