Bitcoin's block reward halving next year will reduce its weekly output by $63 million

As the 2020 Bitcoin block reward halving draws closer, its impact on the currency price is becoming more and more obvious, and Bitcoin supporters continue to discuss this hot topic this week.

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$63 million less output per week

In a discussion started on Twitter on Oct. 18, commentators pointed out that next year’s halving will reduce the value of new Bitcoin in circulation each week by up to $63 million at current prices.

The block reward refers to the number of new bitcoins obtained by mining a new block. Currently, the reward per block is 12.5 BTC, and after the halving, the reward will drop to 6.25 BTC.

Historical block reward halvings have triggered a rally in Bitcoin prices, so it was assumed that the 2020 halving would be no different. Other studies, especially the popular Stock-to-Flow model, have further bolstered the theory that Bitcoin prices will surge as mining rewards decrease.

By comparing historical data, crypto analysis firm Crypto Rand pointed out that the halvings in 2012 and 2016 reduced the weekly issuance value of Bitcoin by $302,400 and $8.19 million, respectively. Analysts predict that the "most dramatic" halving in 2020 will reduce Bitcoin issuance by $63 million per week.

Investor Alistair Milne largely agreed, adding that at the current price of $8,200, the value of new Bitcoin issuance each week would be reduced by $51.7 million. He concluded on Monday:

“Some have argued that Bitcoin’s inflation schedule will have a less noticeable impact on the price over time. But consider that at the current value of ~$8,200, the 2020 halving will reduce mining rewards by ~$51.7 million per week, significantly reducing selling pressure in the market.”

Price increase expected

As Cointelegraph reported, Bitcoin has fallen to $8,200, which is exactly what the stock-to-flow model would expect. Previously, when the price was higher, it actually ran ahead of historically accurate measures.

Still, the positive outlook is not unanimous. In an interview earlier this month, Jihan Wu, co-founder of mining giant Bitmain, warned that the halving would not necessarily lead to a return of bullish sentiment.

He said, "There are a lot of uncertainties, but now is a good time to invest in cryptocurrency mining." Bitmain revealed in a press release on Monday that the company plans to operate the world's largest Bitcoin mining farm in Texas, USA.