Bitcoin Price To Drop Before Halving, Analysts Predict

The next Bitcoin (BTC) halving, which reduces each block reward by half, is scheduled to take place less than three months from now. Crypto investors have frenzied debates over whether this event will be bullish for the leading crypto or not.

Estimated to commence sometime in May, the scheduled halving will reduce Bitcoin miners' rewards from 12.5 BTCs to 6.25 BTCs. And the argument that bulls posit is that the reduction of supply will warrant miners to increase the price of the crypto to maintain operations. But some think that it will have no effects on BTC and that the halving is already priced in since last year.

Binance CEO Changpeng Zhao, better known in the crypto world as CZ, disagrees and believes that the market is not efficient. "Most people don't get information quickly. People need a lot of time to let concepts sink in and adjust," CZ told BlockTV.

"Economic theory tells us that the bitcoin price will likely increase, but this is just the theory and hard to predict," CZ said.

Then there are those who are confident that BTC will drop before the halving since the first two instances have seen Bitcoin's price decline before appreciating months later, and they expect that to be the same in 2020.

Analyst Joseph Young thinks that could be the case as it makes more sense for miners to sell at a higher price now to cover operations for the next twelve months rather than bank on the market's speculations of a higher price after the event.

"Wouldn't it make more sense for bitcoin to drop before the halving rather than after? After the halving, miners produce less BTC. It would be best to sell BTC before halving, finance operations for 12+ months, rather than gambling BTC price will skyrocket to breakeven price."

This harkens back to Tone Vays prediction back in November last year when he spoke about BTC dropping to $4,500 before preceding a rally.

"At some time before the halving probably not in February time so probably around my conference in Las Vegas [...] what I can foresee is that one final capitulation -- like if we consolidate in this $7,500 to $9,000 range going into January and February -- I can see a swift like 50% drop similar to the drop we had in December last year," said Vays.

At Bitcoin's current trading price of $9,771, a 50% dip would put Bitcoin precisely at Vays predicted levels. Still, Vays expects prices to bounce back up to $9,000 to $10,000 within weeks.