Bitcoin production is halved for the second time. Why will the price of Bitcoin continue to rise?

Forex traders seem obsessed with predicting the Fed’s next move, carefully analyzing every word of Fed officials’ comments on the future path of monetary policy. But the world of Bitcoin is a completely different story. Instead, the rate at which Bitcoin’s supply grows is determined by lines of code.
At noon on Saturday, the growth rate of Bitcoin supply fell sharply after the "halving" that happens every four years. Some people believe that the occurrence of the "halving" will drive the price of Bitcoin up because the "halving" reduces the growth rate of Bitcoin by half. The price of Bitcoin had already started to rise before the "halving", but it was not clear on Saturday how the price of Bitcoin would react to the "halving".
Here’s what Bitcoin investors should know:
What is Halving?
When Bitcoin was created, Satoshi Nakamoto (or perhaps a pseudonym) made the supply of Bitcoin inherently deflationary. This is completely different from the policy of central banks of various countries to print a large amount of money and inject unlimited liquidity to cause inflation.
Satoshi Nakamoto created a mechanism to gradually reduce the supply of new bitcoins and built this mechanism into the Bitcoin software.
Bitcoin is created by using powerful computers on the network to solve complex cryptographic puzzles that contain transaction information in order to make transactions. These puzzles are all present in the data chain. Therefore, each Bitcoin transaction is immutable. These powerful computers are called mining machines.

Miners compete to be the first to solve the puzzle. The winner wins hidden new Bitcoins. This process repeats on average every 10 minutes. The time required to mine a single data chain varies.
Miners can hold onto these bitcoins, or they can sell their holdings on the open market. Either way, this is the mechanism by which new bitcoins are introduced into the Bitcoin ecosystem.
The halving occurred at noon on Saturday, when the 420,000th data chain was broken. The miner who successfully solved the puzzle received 12.5 bitcoins. In contrast, the miner who solved the 419,999th puzzle received 25 bitcoins.
What is the outlook for Bitcoin prices?
After the first Bitcoin halving on November 28, 2012, the price of Bitcoin began to rise gradually. However, the rise in the price of Bitcoin at that time was more due to the growing interest in this digital currency, which led to a sharp rise in the price of Bitcoin in 2013.
Some people believe that the rise in Bitcoin prices this year is due to the expectation of halving. Erik Voorhees, CEO of online currency trading platform ShapeShift.io, said that this time everyone is guessing what the trend of Bitcoin prices will be.
Nearly $225 billion worth of bitcoin changed hands in 24 hours on Thursday, a relatively small fraction of the roughly 3,600 new bitcoins mined each day, worth about $2.2 billion at current prices.
Erik Voorhees said, "It remains a question how many of the 3,600 new bitcoins added today will be sold. If all 3,600 are sold, then the halving may reduce the supply of Bitcoin by half. If it is sold further, the impact will be smaller."
Miners’ profits are under pressure
After the halving, the reward for miners to mine the same amount of Bitcoin will also be halved.
Mike Segal, head of security and development at DigitalX, a bitcoin mining company that has developed several bitcoin software, said that if bitcoin prices fail to rise by the same amount, the least profitable miners may be forced to shut down their equipment.
Segal pointed out that this would give some of the largest miners greater control, especially those in large economies. This would further threaten the idea of ​​Bitcoin decentralization. The New York Times recently reported how a large number of Chinese miners effectively controlled the Bitcoin network.
Segal also said, "What worries people is the centralization of mining. The idea of ​​Bitcoin is to decentralize the mining market. But economies of scale make it possible for large miners to squeeze out small players."
Some small miners may be able to survive if they can cut operating expenses, such as reduced electricity costs or have no or very light debt. Voorhees said, "The impact of the halving is not based on the scale of Bitcoin, but on marginal profit margins." In addition, he also pointed out that some small miners who do not have to pay electricity bills can reduce operating expenses more than large miners.
To be sure, the halving is very predictable because it happens on that day, and if miners are smart, they have plenty of time to prepare for the drop in revenue.
But the real impact may take weeks to appear, and it may be necessary to wait until the impact of the halving on the price of Bitcoin becomes more obvious.