March, April, and May were major months for Bitcoin (BTC). After a big price dive on March 12th, Bitcoin slowly recovered to almost $10,000, where it was before the coronavirus world-wide pandemic crushed into the economy. A large portion of the increase came in the days preceding and following the Bitcoin halving last week.

In the middle of the May the rewards that Bitcoin miners receive in exchange for the work they do to add transactions to the blockchain was cut in half. However, it was reported that from April 11th to May 14th, the average cost of Bitcoin network transaction fees increased by more than 1,250%, rising from $0.38 to a $5.16.

One of the most popular beliefs in cryptocurrency circles about halving events is that they are great for the price of Bitcoin, in particular, the halving will cause the Bitcoin price to explode.

This principle arises from the fact that cutting the mining reward in half contributes to greater scarcity of BTC as the number of users on the networks continues to grow. At pre-halving moment, 1800 BTC are produced every day through miners - post-halving, that figure shrink to just 900 BTC per day. Over time, reduction in the supply of BTC leads to a reduction in sell pressure and this adds up over time and acts as an upward force on the price of BTC.

For example, in the past BTC reached highs 12 months after the first halving in 2012, and 18 months after the second halving in 2016. Recovery process could take even longer this time. This time fresh high could be seen 18-24 months after May, meaning Bitcoin could reach a new all-time high between October 2021 and May 2022. Also, the COVID-19 outbreak must be taken into account, considering that that the efforts by governments will be a beneficial for Bitcoin.

While there is a big chance that halving may bring only benefits for BTC’s price in long term, it is also believed that miners could take a serious hit as a result of halving. After the halving occurs, miners’ profits were cut in half overnight. Assuming that a BTC price bump eventually does come, mining operations could become more profitable once again–but it may be a while. Outcome of halving could hurt majority of miners. It’s the small- and medium-sized BTC mining operations–operations that may also be relying on outdated equipment–that may eventually be forced to shut down and sell off their equipment and their BTC. The computing power was at 120.635 million TeraHash/second (TH/s), which was under its yearly peak of 123.2m TH/s and was achieved last week. This means that more miners are joining the network, or that miners already on the network are cranking up their machines full-blast ahead of the halving.

However, regardless of any possible effects that the halving could have on the price of BTC, halving does present another important opportunity for BTC. The halving does create a phenomenal marketing opportunity and everyone already now and more people going to be hearing about BTC even in a greater extent and this process is all over the press. Halving have brought an increased amount of attention to BTC. This has been demonstrated by data from Google Analytics which shows that the number of searches for the word “Bitcoin” has increased considerably within the last several weeks.

BTC also got quite a positive piece of press from China Central Television, a state-owned television network in China.

The article spoke of the skyrocketing price of Bitcoin ahead of the halving, was especially surprising given China’s vexatious relationship with BTC and other cryptocurrencies more generally in the past.

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