Upcoming Bitcoin Halving amid Coronavirus Lockdowns around the

globe - What can we expect?

Table of Contents

Introduction…………………………………………………………………………………………………… 2
What is Bitcoin halving? ................................................................................... 3
What is the significance of Bitcoin halving? ……………………………………………………. 3
What is a Block reward? …………………………………………………………………………………. 3
Bitcoin halving schedule………………………………………………………………………………….. 4
Impact of Bitcoin halving on Bitcoin market……………………………………………………..4
Impact of Bitcoin halving on Bitcoin price……………………………………………………….. 5
Impact of coronavirus on Bitcoin market…………………………………………………………. 5

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Introduction
As an aware and well informed reader everyone knows about the current
Coronavirus situation going on in the world. Covid-19 started to show its effects
on China in December 2019 and slowly it is spreading over the entire world. The
World health Organization (WHO) has declared Covid-19 as a pandemic which is
going to affect the entire world.
The coronavirus may also play a vital role in setting, controlling and changing the
prices of Bitcoin. The global pandemic which originated from China has spread
throughout the world. This virus has impacted the technology sector adversely.
The mining farms which help in solving blockchain related stuff through large
number of computers working 24*7, stored in the warehouses might face supply
shortages.
Governments of all countries have ordered lockdown for a certain time period
which also may get extended due to the ongoing fear of coronavirus across the
world. This has been done in order to break the chain of spread of coronavirus in
order to protect the citizens of a country. This might lead to delayed orders and
congested ports which means that the miners might not get access to hardware
that is required by them in order to keep on verifying transactions. This will also
interrupt the production of Bitcoin. The Bitcoin scarcity in the market due to
coronavirus might lead to a price rise of Bitcoin across the world.
The next Bitcoin halving is supposed to take place in May 2020. Coronavirus is
surely going to impact this halving because of the supply chain scarcity amid the
lockdowns imposed across various countries. The prices of Bitcoin are expected to
face a hike because of the shortages in the market. Bitcoins are highly speculative
in nature, so it is very difficult to ascertain as to what will happen after the Bitcoin
halving in May 2020.As the Covid-19 pandemic continues to affect the investors of
Bitcoin, they will treat Bitcoin as any other currency in order to liquidate their
funds for fulfilling their day-to-day requirements.
Just like Bitcoin, coronavirus is very uncertain and nobody has any idea what it
will do next time. China is one of the most famous countries in the industry, but
as the environmental concerns go around the corner, it is very difficult to
speculate about the market conditions.

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What is Bitcoin halving?
Bitcoin supply is finite. The number of BTC mined per block reduces to 50% after
every 4 years. This process is referred to as halving or halvening.
When Bitcoin came into existence, for mining one block the reward was 50 BTC.
After first halving in the year 2012, the reward for mining one block came down to
25 BTC per block. After the second halving in the year 2016 the reward was
reduced to 12.5 BTC per block.

What is the significance of Bitcoin halving?

The halving process decreases the amount of flow of BTC in the market.
Ultimately, this reduces the supply in the market however, the demand remains
the same.
As per the market scenario, the decrease in supply leads to an increase in demand
which results in increased prices of BTC.

What is a block reward?

A block reward refers to the mining of new Bitcoins through blockchain
technology to the permitted cryptocurrency miners. Blockchain is a digital ledger
used to maintain the records of transactions. On the approval of a transaction, a
miner gets some defined amount of cryptocurrency in the form of BTC.
According to the current norms if a miner mines a block, the reward he gets is
12.5 BTC per block. After the process of halving takes place, the miner is entitled
to get 50% of the reward he was getting earlier for mining a block. In the current
scenario, after halving takes place with the current reward policies then, the
miner would get 6.25 BTC per block.

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Bitcoin halving schedule
The Bitcoin halving is scheduled every four years. The halving process is scheduled
according to the block height instead of a specific calendar date. The halving
process takes place after completion of every 210,000 blocks.
The next Bitcoin halving is expected to take place somewhere around 18 May
2020. This halving will take place on the completion of 630,000 blocks. The Block
reward given to the miners will fall from 12.5 BTC per block to 6.25 BTC per block.

Impact of Bitcoin halving on Bitcoin market

Bitcoin has always had an influential impact on the cryptocurrency market. The
prices of Bitcoin will surely be impacted but there will also be a major impact on
the mining industry. Only the strong will survive in the market after the 2020
halving takes place. The mindset of people regarding the crypto market has
evolved over the time. Earlier, people used to believe that digital currency is not
trustworthy and they would end up losing their entire money invested. But later,
people started investing by understanding the advantages of digital money.
Bitcoin halving will result in many miners exiting the market. Most probable
reason for miners to exit the market would be in order to liquidate their funds.
Also, there are many smart miners present in the current market who would take
the advantage of halving process and continue to stay in the market as long as
they believe that it is profitable for them.

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Impact of Bitcoin halving on Bitcoin price
Considering the past halving events that have taken place, there is always a rise in
the price of Bitcoins. Though, the amount of price change depends largely on the
demand and supply forces of market. For a commodity’s price to increase there
should be an increased or steady demand for the commodity in the market.
The process of Bitcoin halving leads to a decrease in the supply of Bitcoins in the
market which reduces the circulation of BTC in the crypto market. However, the
demand for Bitcoin remains the same leading to a rise in the price of Bitcoin.
Potential investors also plan to invest in Bitcoins at the time of Bitcoin halving as
they have studied the previous trends which clearly show that after the halving
process takes place, there is a price rise of Bitcoin. This new demand created in
the market leads to further increase in the prices of BTC.

Impact of coronavirus on Bitcoin market

Till date in 2020, Bitcoin has made no significant impact in the crypto currency
market. Due to the ongoing Coronavirus outbreak all over the world, the investors
have started selling off their assets in order to liquidate them for fulfilling their
day-to-day requirements.
China has been the country from where the coronavirus has originated. China has
played a very vital role in the crypto currency market. China has resources which
are cheap in nature as compared to other countries so the miners find it suitable
to setup their data mining warehouses in China. The main focus of the data
miners is to achieve efficiency in mining the data by reducing the cost in order to
earn maximum returns. But due to the coronavirus outbreak, the factories have
been shut down due to the ongoing lockdown.
In such a situation, it is very speculative to see whether the investors will treat
Bitcoin same as other assets or the behavior will be different. Generally, when a
pandemic occurs, the markets start bearing losses which ultimately have to be
suffered by the investors. In order to protect their interest, the investors start
selling off their assets so that in the near future they do not have to bear losses
during an ongoing pandemic in the world.

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The larger impact of coronavirus is also placed on the supply chain. Because of the
lockdowns imposed by governments of countries across the world, data mining
has become very difficult which results in decrease in the supply of Bitcoin in the
market. Thus, to say anything about the impact of coronavirus on Bitcoin market
is very difficult. There are many speculations being made by the researchers as to
how the Bitcoin market will react after the process of halving takes place but
none of these theories or speculations give a specified answer as to how the
market will react. The prices of Bitcoin might remain unchanged or there is also a
possibility of a rise in the prices of Bitcoin.

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