The bitcoin price is always changing, most of the time, that change is small and spread out through several days, but sometimes, the price jumps in a few days, and some people are predicting that this will happen in 2016.

Why?

Well, we know that the bitcoins are generated by “solving” an algorithm to add a block to the block chain, this is the base of the bitcoin “mining”. Each time a block is solved, there’s a bitcoin reward for whoever solved it.

This creates an issue, when more and more people start mining, but the demand (people buying bitcoins) stays the same, the price of the bitcoin goes down. So, to counteract this Satoshi stated that every 210,000 blocks solved, the reward for solving a new one, is halved.

In the beginning of Bitcoin history, the reward was 50 bitcoins, but that was halved to 25 in November 2012. Since there weren’t many people using bitcoin back then, the price didn’t receive a major hit.

Bitcoin halving

If thing stays the way they are now, in 2016 the number of blocks will reach 420,000, thus requiring the halving, which can cause some miners to stop mining, and, as a consequence of that, the supply will lower. That means that, supposing that the demand won’t lower too, the price of bitcoin will go up.

In 2015 we saw the number of people a business using bitcoins is growing, and we can expect that in 2016, hence the demand will go up, causing a steady increase in the price.

If we take into account those 2 factors, we can safely say that the price of bitcoin will go up in 2016, now, how much will it rise? Is hard to say that, because of the bitcoin price being more volatile than other currencies, but that is a topic for another occasion.

 

Bitcoin price will go up in 2016