Norway's Kryptografen on Lightning Capital's Bitcoin Halving Research

Sharp rise

In May 2020, the planned halving of "mining rewards" in the Bitcoin chain will take place. This means that the number of new bitcoin mined falls from 657,000 per year, to 328,500. According to a hedge fund manager, this could lead to the bitcoin price rising to between $ 20,000 and $ 50,000 already next year.

The estimate given by Charles Hwang, director of the hedge fund Lightning Capital and professor at Baruch College, is based on a fundamental analysis of the supply and demand of Bitcoin.

Innow very well-known medium record Hwang's, he assumes that demand will remain stable at around 633,000 bitcoins through 2021. During the same period, the number of new bitcoins will halve from 657,000 to 328,500.

"This shift in the supply curve will most likely be the starting point for a new and powerful bitcoin rally"hedge fund

Although Lightning Capital is only a medium-sized, they have good company of other investors, institutions and analysts who point out that halving mining rewards will send bitcoin higher.

This halving takes place every four years. The previous halves in 2012 and in 2016 represented the start of long upswings, even from different starting points. The German bank BayernLB has previously predicted that the halving in 2020 will send bitcoin to $ 90,000.

Demand curve

Charles Hwang of Lightning Capital himself believes his estimates are conservative. He writes that 82,000 bitcoins will be bought through dark markets, and 546,000 bitcoins will be bought through LocalBitcoins.

If there is higher demand from other sources, it could tighten the market even more than what Hwang claims. According to the overview, he has set a very low estimate for eg Bitcoin ETFs and wealthy individuals. Many people see bitcoin as an uncorrelated asset that belongs in a long-term savings portfolio.