2020 is shaping up to be a killer year for Bitcoin. With three major catalysts all ready to converge, things are looking up for the original cryptocurrency. We look at the three catalysts that could make next year a bumper year, and why they matter.
Block Reward Halving
Roughly every four years (more specifically every 210,000 blocks), the reward earned by Bitcoin miners is halved. The idea behind this is to ensure that Bitcoin doesn’t suffer from intense inflation as miner’s rewards enter the supply – Satoshi Nakamoto worked on the basis that the number of users of Bitcoin would increase in line with the supply added to the system, thus maintaining a balance. The ‘halvening’ has in the past resulted in a price surge in the weeks leading up to it – 71% in the eight weeks leading up to July 2016 and 24% in the eight weeks leading up to the 2012 halvening.
Preceding these sharp rises was a period of steadier growth over months, leading many to suggest that history will repeat itself and the next halving, due to take place around the start of May 2020, will prove to be a catalyst for a dramatic price rise. Not convinced? Check out LTC’s performance in 2019 in advance of its own August halvening:
Facebook Coin Arrival
Many in the mainstream media have been claiming that the imminent Facebook coin will be the Bitcoin that Bitcoin wanted to be. Those with more than a passing knowledge of cryptocurrencies however know that the two are completely different, and recent thought has turned to the wider impact of Facebook’s billion-dollar leap into the world of blockchain.
Wall Street veteran Caitlan Long, for one, has argued that Facebook’s arrival on the scene will legitimize cryptocurrencies as an entity as billions of people will start to use them every day, which will lead people to learn more about a world beyond Facebook’s coin. This will lead them, naturally, to Bitcoin, with the likely result that investment will soon follow. Facebook’s token, with a working title of Libra, will supposedly have its whitepaper release this week, with the rollout expected in 2020. The impact isn’t expected to be immediate, but cryptocurrency never does what we expect, and the hype around its launch will be enough to create some action.
A New Market Cycle
Bitcoin has just endured the roughest, longest bear market in its history. Assuming that the recent pump doesn’t last, we can expect by Q3 of this year to have experienced a correction back to the mean of the last nine months – perhaps around $5,000. Even if that lasts longer, until the end of 2019, say, we will still be officially through with the bear market by that point, leading us into a new market cycle that will begin in… 2020.
Full Steam Ahead!
Even one of these catalysts would be enough to give all the long-suffering holders hope, but with three colliding together we could be in for a quite spectacular 2020.