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BitcoinSpotlight

Bitcoin Exhibit this Specific Trend Every Leap Year

One interesting fact that always comes up regarding bitcoin price is the significance of leap year that coincidentally aligns with the crypto’s halving event.

The leading cryptocurrency bitcoin, has lost almost $20B of its market cap since the start of this week, now it is trading in $8700s, at a time where global economy is on the verge of another breakdown due to Corona virus. The epidemic caused Dow and S&P 500 dropped 12% and 11% for the week, respectively, marking their worst weekly performance since the financial crisis of 2008.

Significance of Bitcoin Halving

Bitcoin halving is an event that takes place approximately every 4 years. It is when the bitcoin network’s inflation rate is cut down by 50%, thus the Half-ing. The Halving event in return not only increase the mining cost for the network security due to increase in mining difficulty, but it also cuts down the amount of new limited bitcoin blocks entering its daily circulatory cycle.

time to mine bitcoin block

A interesting fact that is associated to leap year is that bitcoin’s price exhibited a rally in 2012 and 2016, the only two halving events of bitcoin’s brief 10 year history. This fact was also pinpointed by Jack Purdy of Messari Research in a tweet that read

How Previous Leap Years Affected Bitcoin Price

It is necessary to fully analyze past events in of bitcoin’s brief history in order to make accurate predictions, a fact that is well known to traders of all sorts whether crypto or people working on the Wall Street. In order to predict what the future holds with regard to the price of bitcoin, it is necessary to take a look first how bitcoin reacted in its only 2 halving events that occurred in leap years.

First Halving

The first halving caused more than 341.9% increase in bitcoin price where btc witnessed a price hike of $12.31. The very first bitcoin halving took place on the 28th of November, 2012 and it officially initiated the pattern that lead to an astonishing decrease of the block reward to 25 btc per block. Historically, it was noted that the change in trend sprung in the summer of 2011 and the first big jump was recorded in November 2011.

READ ALSO: No, Bitcoin Will Not Become Money of the Future

This event gradually brought the Bitcoin’s inflation rate down to approximately 3,600 btc per day from 7,200 . Bitcoin then went ahead and crossed over 8,000% in a year up till November 2013. However, just a month later, in December 2013, bitcoin price witnessed a steep decline of over 80%.

Second Halving

The second bitcoin halving event happened on the 9th of July, 2016, approximately after 3.6 years and the block reward was reduced to 12.5 btc per block. After halving, bitcoin price witnessed a 112% surge in just 9 months. This btc halving event dropped the inflation rate to almost 1800 btc and bitcoin price rose to $650.

The event lead bitcoin to mark its highest in the December of 2017, when the digital assets price rose to almost $20k with an increase of more than 2,800% in 18 months. But a year later in December 2018, bitcoin hit rock bottom with the price tag of $3,200, dropped almost 80% in a single year.

Where Bitcoin Stands on the Leap Day

The much anticipated Halving event is due in May this year, that will decrease the block reward to 6.25 btc. The leading crypto bitcoin, has lost almost $20B of its market cap since Monday and is valued at $8622 at press time.

Time window from the 2nd to 6th March will be decisive for bitcoin as it will decide either the crypto will go into a bullish or bearish trend. If in that time, bitcoin fail to bounce back and fall below the $8300 critical support, it will show a reverse trend from bullish to bearish.

READ ALSO: If Bitcoin Breaks This Level, I am OUT – Crypto Trader

Hassaan Malik

Co-founder of BlockPublisher, Hassaan is a technologist at heart with a keen interest in blockchain, cryptos and traditional financial markets. Email: hassaan@blockpublisher.com, hassaanmalek@gmail.com

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