In May 2020, Bitcoin underwent the third halving. This halving means that the reward for mining a block now rewards half the number of Bitcoins than it used to before May. People who invest in Bitcoins are keeping a close eye on these halving that happen once in four years. What does this halving do to the market? Is it the right time to invest in Bitcoins? Let us find out.
The latest halving of Bitcoins happened on 11th May around 5 PM EDT. After this halving, people who mine Bitcoins on the network would only receive 6.25 BTC after mining a block successfully as compared to 12.5 BTC before the halving.
This halving is crucial as it is the first halving that happened after Bitcoins became immensely popular in 2017. Before the halving, experts had different opinions about the consequences. A few people believed that the price of Bitcoins would fall after the halving. They were correct as the Bitcoins which were trading for around $10,000 a coin fell to $8,568 per coin a day after the halving. However, the community was confident that the downfall would not be permanent, and Bitcoins will regain their lost value slowly but surely. As you can see, the Bitcoins are regaining their value, and at the time of writing, a Bitcoin is worth close to $9,530 and have even touched the $10,000 mark as well.
The Bitcoin market has been highly volatile, and it was not a huge surprise that the Bitcoins saw a loss of $1,500 per coin in a single night. The reduction in supply meant that it would be harder to get Bitcoins after the halving. As a result, people started to sell their Bitcoins and invest in other cryptocurrencies. The rule of supply and demand applies to all commodities, digital or physical. As the market was flooded with Bitcoins, the price of Bitcoin fell sharply.
Now, the answer to the question. Is it the right time to buy Bitcoins? Well, if you asked this question a few days before the halving, you would have got mixed answers. A lot of people would have dissuaded you from investing in Bitcoins as they believed that the prices would fall. Meanwhile, others would have told you that Bitcoins would regain their value eventually and investing in Bitcoins after the halving is a brilliant idea.
As you can see, the prediction of the later was spot on. Bitcoins fell by $1,500 one day after the halving and regained their value within a couple of months. So, people who invested in Bitcoins after the halving managed to make tremendous amounts of money. As of now, the price of Bitcoins is stabilized (they still are highly volatile asset). If you invest in Bitcoins now, you are less likely to make quick profit as compared to after the third halving.
