Why Upcoming Bitcoin Halving Would Dwarf the Previous Two BTC Halving?

Bitcoin Halving

The next bitcoin halving is less than two weeks away and apart from the bullish sentiment around it, a lot has changed since the last two halving events. Let’s see how the upcoming third halving is different from the others in the past.

Before We Begin, Why Bitcoin Halving Is Such A Hype?

Bitcoin Block Reward Halving is known to be a highly bullish event primarily because it cuts down the supply of Bitcoin produced per mined block by half. With a fixed market cap of 21 million, every halving event makes Bitcoin a scarcer asset, giving a bump in its value because of the supply-demand dynamic. The Block Reward halving takes place after every 210,000 blocks mined which come take approximately 4 years to complete.

Bitcoin, when launched back in 2009 produced 50 BTC per block which was reduced to 25 BTC during the first halving in 2012. Similarly in 2016, the supply was cut from 25 BTC to 12.5 BTC and now during the upcoming halving in May it would be reduced to 6.25 BTC.

Alright, let’s dive in and find out WHAT’S SO DIFFERENT WITH UPCOMING BITCOIN HALVING!

1. Bitcoin is no more an Internet-Based Magical Money

Prior to its 2017 all-time high, Bitcoin was only known to a selected group of people who saw it as magical internet-based money. Being a relatively new asset class Bitcoin showed high volatility and its price movement was often fueled by media reports and rumors and people often invested in Bitcoin as they thought it is a get rich quick scheme. 

However, the bear market that followed the 2017 all-time-high, helped bitcoin is shedding its bubble-like behavior, made it more stable while brought down the volatility levels significantly. The volatility level spiked again in March this year due to the market crash and panic selling. If we look back at the previous halving, the volatility also spiked up prior to 2016 halving

Bitcoin Volatility

However, the implied volatility, which measures the volatility in near future saw a dip to the levels of 2016.

Bitcoin volatility
Source: Skew

Apart from the volatility, the hash input which is a key metric to determine the security of the Bitcoin network is at 7X higher than its 2017 levels. The more hash inputs mean more number of miners are actively confirming the transaction and looking for the next block on the network, which in turn strengthen the network’s security against 51% attacks.

2. Interest Around Bitcoin Halving at an All-Time High

The 2017 price rise surely pushed Bitcoin into global limelight and generated curiosity among the common public on how a decentralized form of currency works without government authority. The curiosity later turned into an understanding of how money works, and as a result, people’s interest in Bitcoin is at an all-time high.

google trend
Google Trend on Bitcoin Halving Keyword

The Google metrics suggest that the searches for ‘Bitcoin Halving’ is at an all-time high and only rising further. The following Google Trend data chart suggests that the searches are only surging by the day.

3. Bitcoin Wallets with non-zero Balance Peak

Another metric that shows that the people are more bullish towards Bitcoin today than they ever were in the past, is the rise of Bitcoin wallets with a non-zero balance. This means more number of people have dived into the Bitcoin game and have made at least one transaction than ever before.

Bitcoin addresses
Source: Glassnode

The rise in the number of such wallets also indicates wealth distribution among retail investors. Wealth accumulation by whales has been a cause of worry for many as these whales are known to paly the pump and dump game, thus manipulating the price movement in the market. However, the rise in the number of non-zero balance wallets is an indication that retail investors are actively investing the king coin.

4. Bitcoin’s Acceptance and Legality

One of the most prominent factors that would make this halving event of great significance is the acceptance of Bitcoin around the globe. During the last halving, a majority of the world was unaware of the ‘digital gold,’ and even after 2017 media attention, a majority of the governments deemed it as an internet bubble.

However, things have changed drastically in the past two years and not only Bitcoin is legal in the majority of the world, but many have also either regulated it, (like Japan, South Korea, Malta, Singapore) or are looking to regulate it (the US, France, Germany etc.). As of today, Bitcoin is legal in more than 111 countries, while illegal in only 10 countries.

These factors make the upcoming halving event of great significance and quite different from the previous two. While the debate around Bitcoin’s price might continue, its significance as a decentralized financial tool is growing with each passing day.

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