What Bitcoiners Really Think About The Halving

One of the unique features of bitcoin monetary policy is what is known as the ‘halving.’

Every four years, the size of the reward for successfully mining a block is reduced by 50%. This is the mechanism by which the speed of issuance is reduced over time until the entire 21 million hard-capped supply of bitcoin is issued. The previous two halvings preceded bull runs, leading many members of the community to view the event with significant anticipation.

This year’s halving halving is right around the corner and the excitement is palpable. Between a return of mainstream media coverage, hash rates hitting all time highs, and famed hedge funders jumping in the space, bitcoin as an asset and a community look incredibly strong going into this milestone moment.

Still, not everyone agrees about every part of the halving. There are meaningful debates around everything from how it will impact price to how important it is in the context of other forces shaping the bitcoin market.

For the last few weeks, Blockfolio has been polling its users about exactly these questions. The full results of those polls are presented here for your interest and perusal.

Question 1: Is the bitcoin halving already priced in?

One of the most passionate debates in the bitcoin community is whether the halving is priced in. Some argue that because the event is a known phenomena, investors will already incorporate it into their calculations. Others believe that it takes time for the market to truly understand the impact of reduced issuance.

In our poll, more than 10,500 Blockfolians voted. When all was said and done, nearly half believed that the halving was not priced in, compared to under 30% who said it was. Strike that one against the efficient market hypothesis!

Question 2: One month after the bitcoin halving, will the hash rate be higher or lower than it is today?

One of the groups most impacted by the halving is of course the miners, who see the block reward they get for securing the bitcoin network reduced by half. This can have major impact on the profitability of miners and can even force certain miners who are operating either inefficiently or with older equipment to stop mining entirely. We asked the community whether the hash rate — the processing power of the bitcoin network — would be higher, lower or the same one month after the halving.

Out of 8,000+ voters, 37% said higher. This position tends to be held by those who think that the halving forces out less efficient miners and leaves more pie to be captured by the strongest mining operations.

Question 3: Do you believe in the Stock-to-Flow model?

One of the most discussed and debated bitcoin models is the Stock-to-Flow or S2F model created by Plan B. It has attracted some highly influential acolytes even in traditional finance, but some reject the model’s ability to predict future prices of bitcoin based on supply decreases.

In our poll of more than 5,800 Blockfolians, the S2F model had a pretty major victory. 66% of respondents said they believed in the model at least somewhat (with a majority 37% saying “hell yeah” they did) versus only 9% deniers. Score this one to Plan B!

Question 4: Is the halving the most important factor influencing bitcoin’s price in 2020?

Coming into 2020, many pointed to the halving as one of if not the most important factor likely to shape bitcoin’s narrative and price for the year.

For the last two months, however, even more focus has been on how bitcoin is reacting to COVID-19 and the broader macro landscape.

We asked the community whether, even in light of coronavirus, the halving would end up the most important factor in bitcoin’s price in 2020. In the group of more than 8,800 responds, it was the nuanced answer — that the halving would be “part but not all” of the biggest factor shaping price — took it down.

Question 5: What will bitcoin’s price be in 3 months?

We can fight it. We can deny it. But at the end of the day, one of the most powerful way to get new people participating in bitcoin is ‘number go up.’

For that reason, we of course had to finish our poll series with the least knowable and most-fun-to-debate question of all: where will bitcoin’s price be in 3 months?

Drawing the largest response of the set — a full 12,650 votes — the “Much higher than now” absolutely took it down with 46% of the poll.

Given how many factors are aligning right now (Paul Tudor Jones, anyone?) we have a feeling that this group of optimistic Blockfolians are standing on solid ground.

Thanks everyone for participating and happy Hal-Finning!