Bitcoin production halving and surge in history are unlikely to repeat

In the early morning of July 10, Bitcoin experienced its second halving, which means that the revenue earned by global miners per unit time will be halved. The first halving of Bitcoin occurred in December 2012, when the price of Bitcoin increased 20 times in less than four months. Will such a myth of getting rich quickly happen again?

The price fell instead of rising on the halving day

Recently, Bitcoin players have welcomed a major event, which is the halving day, which happens every four years. According to the design rules of Bitcoin, the number of Bitcoins that Bitcoin miners can mine is reduced from 25 Bitcoins every 10 minutes to 12.5 Bitcoins. Since the total number of Bitcoins is limited to only 21 million, halving the output means a reduction in supply.

According to the supply and demand relationship, the price of Bitcoin should rise, but the reporter of "Golden Securities" found that Bitcoin has fallen instead of rising. Data from Huobi.com, a Bitcoin trading platform, showed that after the news was released, the price of Bitcoin fell slightly by 0.9%, fluctuating around 4,350 yuan in RMB, and then fell by 3.23%, with the lowest price at 4,169 yuan.

Huobi co-founder Du Jun told the reporter of "Golden Securities" that "the price did not surge, which was within our expectations." He said that Bitcoin trading is the same as the stock market, and you can't make money by disclosing information in advance. "The halving of production has been hyped since last year, and the good news has been digested in advance."

Data shows that Bitcoin has experienced three rounds of sharp increases since May. In June this year, the price of Bitcoin rose strongly again, from 3,480 yuan per coin to a peak of 5,185 yuan. However, there were signs of a decline in early July and the current price is around 4,300 yuan.

History is unlikely to repeat itself with a 20-fold surge

The first halving of Bitcoin occurred in December 2012, when the price was around $13. By March 2013, it had risen to $266, a 20-fold increase. "It's hard to repeat a 20-fold surge," Du Jun said. The last time the production was halved, the price base of Bitcoin was very low, only a few dozen yuan, but now it has risen to 4,000 to 5,000 yuan, which is a high cost. Secondly, it is difficult for a small group to push up the price. "The surge in Bitcoin this year is mainly due to favorable policies, which attracted some big money to push up the price, rather than changes in supply."

Zhu Jiawei, vice president of operations at Huobi, said that unless there is major positive information about Bitcoin, such as advancement in its applications, it is unlikely that the price of the currency will surge after Bitcoin production is halved.