• Mallory Peek

May 2020 Crypto Update

IT Block's May 2020 Cryptocurrency news update

Bitcoin is still the leader in the cryptocurrency market, but it has also seen the most turmoil in recent weeks. The first week of May saw Bitcoin rise to $10,000, a major jump since the lows at the beginning of COVID-19. By May 7, Bitcoin was up almost 40% from the beginning of the year. While some predict that Bitcoin will have its best year since 2017, the Bitcoin halving is making waves in cryptocurrency this month. However, cryptocurrency is still valuable in 2020 despite market woes due to the coronavirus pandemic.

May 2020 Crypto Update

Bitcoin Experienced Record Highs

May 2020 Crypto Update


The sell-off in March sparked by the coronavirus pandemic impacted Bitcoin and cryptocurrency in unexpected ways. However, global stock markets have largely rebounded in the following weeks, in part to fiscal and monetary stimulus led by the United States. There are still plenty of concerns for investors surrounding COVID-19 and how the virus will be handled around the world.

Some financial experts, including Lennard Neo from Stack, warns that Bitcoin and the cryptocurrency market are likely to experience volatility despite the recent rebound. Uncertainty surrounding COVID-19, policy response to the virus, and the economic response puts Bitcoin’s future in question. And, as the leading cryptocurrency, trends in Bitcoin are often seen in other cryptocurrencies.

May 2020 Crypto Update

What is the Bitcoin Halving?

May 2020 Crypto Update


Bitcoins are not an unlimited resource. There are only 21 million Bitcoins in the world, uncovered by mining. Mining is the process of updating a bitcoin’s ledger and unlocking new Bitcoins that were previously locked in the system. In addition to a limited supply, Bitcoin is centered on constrained supply growth. At different intervals, the system for Bitcoin halves the amount of Bitcoins that are unlocked when a block is mined.

Halvings occur every 210,000 blocks mined, which is roughly every four years. Before May 2020, Bitcoin had gone through two halvings. In both 2012 and 2016, the price of Bitcoin rose substantially in the year after the halving. As the growth of supply slows and demand remains the same, the price of Bitcoin increases.

With the most recent halving on May 11. Rewards for mining dropped from 12.5 to 6.25 Bitcoins per block in the chain. This is a much smaller reward than the payout of 50 Bitcoins for each block mined in 2009. The halving process is estimated to continue until 2140 when miners will be rewarded with fees instead of Bitcoins. Of the original 21 million Bitcoins, only 2.6 million are left to be released. The drastically limited supply will have implications for investors, including changes in demand and price.

May 2020 Crypto Update

Impacts of the Halving

May 2020 Crypto Update


Despite the smaller reward, miners are still incentivized to complete blocks due to the increase in value for Bitcoin. However, if the value of Bitcoin does not increase when the reward is halved, the Bitcoin system can lessen the difficulty of the mining process. In the previous two halvings, prices for Bitcoin ballooned before dropping significantly. After the price drops, though, Bitcoin stabilized at prices that were higher than before the halving.

Halvings always come with tense speculation and wide-ranging predictions about the impact of the event. The hype around this year’s halving grew tremendously, largely in part to the volatile market due to COVID-19. There is also a concern over whether or not the halving will be executed successfully. A potential bug or flaw in the core Bitcoin software could cause major issues. However, the third Bitcoin halving was successfully executed on May 11, 2020.

Before this year’s halving, miners were producing 1,800 new Bitcoins each day, which equated to about $16.2 million. Following the halving, 900 Bitcoins are currently produced each day. They hype around the halving has also drawn more attention to Bitcoin, encouraging new investors despite stock market crashes from COVID-19.

The change in reward caused some miners to leave the Bitcoin network because their units were no longer profitable. Upgrading equipment and finding inexpensive electricity sources is highly unlikely for the majority of miners who shut down their units immediately preceding and following the halving.

Bitcoin’s hash rate, or the processing power used by the Bitcoin network, is expected to decrease. There was already volatility before the halving occurred, and the hash rate is estimated to drop further. However, the hash rate could increase again when the next wave of mining machines are issued.

May 2020 Crypto Update

May 2020 Outlook

May 2020 Crypto Update


The halving made May an exciting month for cryptocurrency, especially Bitcoin. The full impact of the halving has yet to be seen, but cryptocurrency is still fulfilling its purpose even as the market rises and falls during COVID-19. By leveraging technology, Bitcoin and other cryptocurrencies cut out the middleman. Buying and selling is less expensive and financial transactions are more efficient. The security of cryptocurrency continues to make it highly desirable. This period following the halving is likely to see more uncertainty before the market stabilizes again, especially with COVID-19 as an unpredictable factor.




Thank you for reading 'May 2020 Crypto Update' by IT Block. IT Block is an IT support services provider based in Singapore and a registered Google News source. #crypto #bitcoin #news #cryptocurrency #market #IT #support #services #singapore


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