The halving event is hard-coded into the Bitcoin protocol. The general idea, as per Satoshi’s line of thought, is to keep in check inflation and slowly but surely wean the network’s miners from rewards to a more reliable and regular transaction or network fees model as Bitcoin is globally adopted.
Therefore, next year’s halving event will reduce the amount earned by miners from the current 12.5 BTC to 6.25 BTC per block effectively slashing daily BTC emission.
With less than 320 days to the anticipated Bitcoin halving event, it’s not clear what will happen to the miners and the price of Bitcoin. However, since the mining rewards are likely to decrease, miners may end up switching off their rigs due to projected losses. At least that is according to a leading crypto analyst and vocal Bitcoin supporter, Tone Vays.
Tone Vays, a crypto analyst, notes that:
“Technically, everything is in play until the end of 2010, after that sub $5,000 is not likely. Worst case scenario: prices drop to $5K into the halving, then after the halving 70 percent of miners shut down due to negative revenue, Bitcoin spirals down in price but then rises from the dead!”
Technically, everything is in play until end of 2020, after that sub $5,000 is not likely.
Worst Case Scenario: prices drop to $5k into the halving, then after halving 70% of miners shut down due to negative revenue, #Bitcoin spirals down in price but then rises from the dead!
– Tone Vays #UnderstandBit (@ToneVays) July 5, 2019
Bitcoin Will Eclipse Altcoins
But that’s not all. Tone predicts that the halving will help Bitcoin cement its position as a king of crypto. In that case, attention will b shifted away from competing, high throughput networks as Bitcoin Cash (BCH) and Litecoin amongst others. Bitcoin’s edge in this case will be not in its role as a medium of exchange but as a store of value, a settlement layer that is secure and truly decentralized. According to Tone, “they will never be a store of value and will depreciate against BTC.”
Even so, and as expected, opinions varied. For example, Expsycho, a Twitter user, opines that the halving will have the opposite of effect, convinced that the current rally is in anticipation of next years BTC halving. He argues that post-halving prices are already “priced-in” because BTC will simply dump.