Steemit Crypto Academy Contest / S12W2 -: STEEM Vs Bitcoin halving

Bitcoin halving is one of the events that happen in the crypto space. Many individuals or investors have various views about that event. Currently, many are looking up to it to signal the last phase of the long awaited bull run for the crypto currency cycle.

So what is Bitcoin halving and how does it affect the crypto market?

What could be the effect of Bitcoin halving on crypto currencies? Explain

First I would like to explain what Bitcoin halving is.

Simply put, Bitcoin halving is the cutting into half of the miners reward. That is to say, if a miner receives 2 Bitcoin for mining a block, when the halving occurs, he will now be rewarded with only one Bitcoin for mining a block.

This is a deflationary action taken to still maintain and increase the price of Bitcoin even if the demand remains the same, thus maintaining its scarcity. No matter what happens, the price can never go down to where it came from. So, through this means, supply is restricted, creating more demand leading to increase in price. This halving takes place every 3 to 4 years. It started in November 2012, and have taken place three times.

99.9% of all crypto currencies are being controlled by Bitcoin. When it goes up, most other crypto currencies goes up too. When it goes down, they all follow suit.

So during halving, in which the miners rewards are reduced by half, thus creating scarcity, Bitcoin price literally move up. As the price of Bitcoin moves up, the prices of other crypto currencies also go up. So it positively affects the price of other crypto currencies.

Sometimes, after the halving, other crypto currencies tends to extend their price increase up to a year, outperforming Bitcoin in the process.

So generally, Bitcoin halving leads to an increase in the prices of other crypto currencies.

How was the price of STEEM affected by the latest Bitcoin halving? Explain and show screenshots.

To know the effect of Bitcoin halving on steem coin, we need to know the actual date the last Bitcoin halving took place.

The lastest Bitcoin halving took place on 11th May 2020. So with that now, we can go to the charts and see the effect it had on steem price whether negative or positive.

As at May 18, 2020 just a few days after Bitcoin halving, we can see that the price of steem shot upwards to $0.32 from the $0.28 level. That was a significant increase in price clearly attributed to Bitcoin halving. The chart below shows that.

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Additionally, like I said earlier, for most alt coins like steem coin, the after effect of the halving still last over a period of some months. This can be confirmed from the picture below.

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So we can see from the chart that the price more than quadrupled.

So Bitcoin halving had a positive effect on the price of steem coin.

Make a technical analysis of the price you forecast for STEEM at the time of the Bitcoin halving. Screenshots are required.

I will be using the last halving as a basis for this analysis. Using historical analysis, before the Bitcoin halving in 2020, steem coin was priced at $0.28 level and halving caused the price to jump to $0.35 level, which was a 25% increase in price. However, year after the halving, steem coin price rose by 457% to $1.432. This was massive.

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For the current halving, steem price is currently at $0.16, that point is a strong support point for steem. It is already a triple bottom, suggestive of more likely move upwards of steem coin price. Once the movement upwards starts, I expect steem coin price to reclaim the major resistance between $0.35 dollars and $0.4. That is the price I expect it to be at before the halving in April, 2024. Following the halving, I expect a break of $0.4 to retest the last alt high of $1.432. Then later like in 8 months time, reach this cycle new alt high of $2.5 by 2025.

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This is my forecast for steem price during Bitcoin halving.

Advantages and disadvantages of the Bitcoin halving, for the cryptocurrency world.

Advantages

• Halving leads to price appreciation for most of the alt coins and crypto currency space. We see price rallying during that time.

• Halving leads to increased awareness of crypto currency to many people. The increase in price generally attract new investors to it, thus making it become more universal.

• Halving leads to a more universal adoption of crypto currency as a medium of exchange with less control from the ruling authority.

• It enhances the security of the Bitcoin blockchain, making it more secure.

Disadvantages

• Bitcoin halving creates unwarranted increase in crypto currency prices which is not supported by any financial fundamental or future outlook of the project.

• The increased awareness will atract regulatory bodies who will want to design a framework to regulate its operation. This is not the purpose of Blockchain transactions.

• The drop in price that follows after the upward spike in price can lead the miners into serious difficulties of maintaining their mining equipment.

Conclusion

Bitcoin halving is an important event in the crypto space. It determines the cycle of the crypto space making it more adorable. All crypto enthusiasts are looking forward to next year Bitcoin halving.

I will like @drhira @mahadisalim and @starrchris to take part. The contest post is here

Success to you all!