With currently 640 US dollars, the price per bitcoin has risen by approx. 50 % since the beginning of the year. While macroeconomic factors, such as the economic and political uncertainties in China and Europe, have played an important role in the past, it is now mainly the upcoming Bitcoin Halving.
Hardly anyone can predict with certainty how the reduction in mining yields will affect the network. The market experts’ forecasts cover a wide range.
Some predict that bitcoin halving will lead to rising bitcoin prices, while others expect a negative or no effect at all on the bitcoin price. Various predictions have also been made about the range of fluctuation, i.e. volatility.
Briefly to the background: Bitcoin miners provide computing power to attach the transactions summarized in blocks to the Bitcoin block chain. For each successfully added block, the Miner receives Bitcoins. Currently there are 25 bitcoins per block. However, this number will be halved to 12.5 bitcoins on July 9. Over the years, this yield will continue to halve until the maximum of 21 million bitcoins is reached.
Predictions for Bitcoin news
Joe Lee, founder of the trading platform Magnr, is one of the market experts who predict a rising Bitcoin news price. However, he assumes that the positive Bitcoin news effects will only become apparent in the medium to long term.
Investor and entrepreneur Vinny Lingham also expects prices to rise, which should keep selling pressure among Bitcoin owners to a minimum. Under these conditions the Bitcoin price should increase slowly but steadily, Lingham says.
However, Lee adds that some miners may come under short-term pressure if the price doesn’t rise fast enough. Correspondingly, there is a high probability that short-term volatility will increase due to some speculative traders. According to Lee, these price fluctuations are supposed to be short-lived.
On volatility, Lingham says:
“Bitcoin is fundamentally susceptible to fluctuations. The biggest mistake we can make is to assume that the price will continue to rise regardless of economic, political and technological circumstances.”
Negative price forecasts
Lingham points out that halving may have some technical and economic effects which have not yet been taken into account or priced in by market analysts.
Depending on how successful the Bitcoin Halving is, there is a possibility that the Bitcoin price will go through a 3 to 6 month consolidation phase. This could lead to the establishment of a new price level with high volatility for this period, which would settle in a range of 400 to 500 US dollars.
The CEO of the Bitcoin trading platform Whaleclub, Petar Zivkovski, assumes that in the weeks after the halving the selling pressure will increase in order to realize profits from the high price increases of the last time. Even though Zivkovski does not have any data to support his predictions, he expects Bitcoin to have rock-bottom prices of 200 to 300 US dollars.
This negative outlook is also supported by Rik Willard, founder of Agentic Group LLC. He also expects the Bitcoin price to fall, but this should be short-lived.
Willard compares the Bitcoin Halving with a stock split and the associated devaluation.
“However, I expect the Bitcoin price to reach current highs faster than a stock in an extremely bullish market.
Willard and Zivkovski agree that volatility will be limited. After all, most of the halving is priced in and even the last halving, from 50 bitcoins to 25 bitcoins, did not show any major fluctuations.