What made the third halving of bitcoin special?

But it's very likely that this wouldn't have happened without the Bitcoin halving event that occurred on May 12, 2020. Here, we explore the reasons that made this having special and what are the main outcomes of this event.

Blockchain System

The blockchain system is designed in a way to control the inflation rate and the supply of BTC without the assistance of a third entity. As we know, this is the main attribute of the decentralized, peer-to-peer-based blockchain system. For this purpose, the creator of this technology and Bitcoin, Satoshi Nakamoto, has decided to schedule an event Bitcoin halving that will happen every four years or after 210,000 BTC are mined.

Due to the variability of the rate of the addition of new blocks in the network, it's hardly impossible to know when exactly the new halving will occur. But, what's in common for each halving is that the block reward is decreasing.

Since Bitcoin was initially launched, the block reward has halved during two halving events. First, in November 2012, when it went from 50 BTC to 25 BTC, and the second event took place in July 2016 when it was reduced from 15 to 12.5 BTC. On May 12, 2020, when 630,000 blocks were added to the network, the block reward was further decreased to 6.25 BTC.

What made this third halving special was the fact that already the users were familiar with the bullish cycles of Bitcoin that commonly happen after a halving event takes place. Furthermore, the overall supply of BTC was also diminishing because there is a finite number of BTC of 21 million, and by 2020, 18.5 were already mined.

Also, due to the rise of popularity of trading sites, the increased number of retail investors in BTC only increased the market demand. For example, Crypto Engine is AI-driven, high-performance platform designed to deliver accurate trading signals. Plus, you only need about 10 minutes to set up your account, while registering on the site requires a deposit of $250. Moreover, the members can potentially earn up to $750 on a daily basis.

Bull Run

The main outcome due to the decreased supply of BTC and increasing demand was Bitcoin's bull cycle in 2020. Although it was expected, no one could have predicted the steady, continual rise of the price over the course of the year as well as the increased institutional support.

More specifically, the price after the halving was approximately $9,999, while before the halving, it varied between $8000 and $9000. Afterward, it was surging, accomplishing a rise of about 170% by December 2020.

In October, it reached $13,646.02, in November broke $19,157.16, while in December, it surpassed $20,000. Then in January, it peaked at $40,000, and in February, it reached a price of $54121.17, while in March, Bitcoin was worth over $60,000.

This meant that it had a bull run that lasted over a year, which was unprecedented for Bitcoin so far, and the price of $60,000 made it possible for a prediction of a price of $100,000 by the end of 2021. This milestone wasn't expected for Bitcoin so soon.

Well-Known Investors

This leads us to the next point, and that is the support of well-known investors. Not only have investors like Tesla expressed public support for BTC and actually invested $1.5 billion, but also many businesses like PayPal, MasterCard, Home Depot, and many other brands have accepted BTC payments, and they contribute to the higher liquidity of Bitcoin and its global mainstream adoption.