After the great bull run witnessed in 2017, most of the enthusiasts are speculating on what will be the influential factors that will foster the next one. Some moments seem to bring us closer to it, for example, the news of Facebook entering the Crypto World with Libra or the major partnerships some blockchain and cryptocurrency projects are creating with worldwide famous Companies.
The kind of moments that spark the attention of the media towards Cryptocurrencies. But, we still haven’t seen the market reach the All-Time Highs that it did back in 2017.
So, here are two major points that can possibly speed up the next Bullish phase:
This major update is said to be ready at the beginning of 2020. The greatest difference is that this update will change the platform to a Proof of Stake (PoS) mechanism, so the users will be able to earn interest by staking their ETH in a node. The bigger the quantity, the higher the interest.
The Proof of Stake system wasn’t invented by the Ethereum Network, but being the Second Largest Cryptocurrency in the market, this is a really big development.
So, not only is the community waiting for this update to come, which will bring a hype from within, but also the news that people will be able to earn interest on holding Ethereum, one of the most famous Cryptocurrencies, will also create a hype to the ‘outsiders’, which will attract new users, banks and financial institutions.
Supply and Demand Law – With the Ethereum 2.0, Millions of Tokens will be staked for Holding since it will be so profitable, meaning that probably around 15% of the total ETH in circulation will be untouchable.
Secondly, changes in the mining process of Ethereum will come as well, nowadays we have miners adding around 6 million ETH to the market per year, but with the PoS mechanism, this amount will decrease enormously, bringing us to less than 1 million ETH being mined per year.
So, Ethereum 2.0 will rise the demand but at the same time reduce the supply of ETH in the market, so following the Economics Law, this will lead to a substantial price increase in the crypto market especially for Altcoins since most are on the Ethereum network as ERC-20 tokens.
The Bitcoin Halving in May 2020
First of all, let’s take a look at how the Halving process works and how it increases the price of the digital currency.
This is a process that has happened twice in the Bitcoin history and on both occurrences, Bitcoin experienced a substantial price increase. It’s basically a process where the mining rewards of Bitcoin are cut in half overnight.
So again, following the Supply and Demand Law, we are going to see the price go up.
Let’s take a look at the numbers in the past:
The first Halving happened on November 28th, 2012. There was indeed an increase in the Bitcoin price, but not the same day increase, it took a few months and was definitely a gradual increase. After 6 months, Bitcoin grew to an All-Time high 18 times higher than the price at the time of the Halving.
Taking a look at the Second Halving Event which occurred on the 9th of July 2016. A look at the numbers, on July 9th, 2016 shows Bitcoin was priced at $666.38 and 6 months later on the 9th of January 2017, Bitcoin was priced at over $900, an increase of 37%. One year later, the price went as high as above $2,500, depicting an increase of over 300% in a year.
So, What Can We Take From This?
This is very similar to how regular markets respond to scheduled events. The change in supply is already factored in the price by the time it occurs. Meaning that traders anticipate this event and make their moves accordingly and that is why the price suffers no big changes in the beginning but it gradually goes up.
All this being said, what we can expect on the 27th of May 2020 is not an instant big change in the price, although in the 6 to 18 months after that we can most probably guarantee that the price will be way, way higher.
When To Expect The Bull Run?
There is no fixed date to when the next major bullish phase that will take prices to new all-time highs will ignite, but the launch of Ethereum 2.0 coinciding with the Halving, can easily be the 2 major points for the Bull Run.
We can rest assured that 2020 will be a year of green colors to the Cryptocurrency Markets Since the Halving process takes around 6 months to create a noticeable change on the Bitcoin Price and following the ETH 2.0 update, we can most probably count on a strong increase of prices on the 3rd quarter of 2020.