Co-founder of Decred, one of the leading cryptocurrency projects, made statements about the effects of the upcoming halving.
Decred said his founding partner halving could double the price of BTC, where the main focus should be on miner expenses. Jake Yocom-Piatt, co-founder and project manager of the company, thinks that the upcoming prize split will increase the BTC price due to miners.
Answering Cointelegraph’s questions and answering with an e-mail, Piatt said, “This will double their costs since miners will do the same and earn less BTC from now on. Miners’ overall expenses are now fixed. So they will want to double their Bitcoins to keep their profit margins stable. I believe that this supply shock will significantly increase the price of Bitcoin ”.
As is known, miners’ rewards are halved as written in the code of Bitcoin every 4 years. Not all 21 million Bitcoins are in circulation. Since its creation 10 years ago, Bitcoin’s circulating supply has been growing consistently with mining rewards. With current figures, a miner anywhere in the world finds roughly one block every 10 minutes, and earns 12.5 BTC in return. As a result, this means that 12.5 new Bitcoins enter the market every 10 minutes. On or after May 11, miners will now start earning 6.25 BTC for the same job.
Expects double price increase in the short term
Due to the changing dynamics, Yocom-Piatt predicts a higher Bitcoin price. “I think the price will double in the short term, but when we consider the crypto markets for the long term, it is not right to comment,” Piatt said. The ‘stock-to-flow’ rate increases significantly with halving. This is good for the long-term price of Bitcoin. ” said.
The ‘stock-to-flow’ model in Bitcoin is the product of the cryptocurrency analyst ‘PlanB.’ Here, the supply of Bitcoin is compared with its value, taking into account halving.
PlanB shared a recently updated ‘stock-to-flow’ chart and included gold and silver in its latest chart.
Bitcoin is trading at $ 9250 on the cryptocurrency exchange Bitstamp, when the news goes live.