In the short term we might see a decrease in the price but in the long term we might see a fluctuation up and down. That’s because the supply will exceed the demand. There will always be someone who wants to sell at a lower price and there will always be someone who wants to buy.
How Bitcoins halving phenomenon is similar to Goldana Effect
The bitcoins halving phenomenon is similar to the Goldana Effect, which was caused by the worldwide collapse of the gold market. When there are more sellers than buyers there will be an upward trend in prices. This downward trend will continue until supply meets demand and the prices begin to decrease. If supply exceeds demand then the value of digital currency trading can decline downward.
But when the supply exceeds the demand then the value of digital currency trading can increase upward. This increase in value will cause the price to rise again because supply exceeds demand. So in this case the value of the digital currency trading will continue to increase until supply and demand equilibrium is reached. We may see a price bubble similar to the Goldana effect in the future.
It will Cause the decrease in price
But the halving phenomenon will cause the price of digital currencies to decrease. The price decrease will be even greater than the halving because the supply is decreasing for all currencies. For instance, if there is only one hundred million coins in circulation then the price per coin will increase. But if there are two hundred million coins in circulation then the price per coin will decrease.
One thing that will help keep the value of coins high is the high level of demand for them. Demand is high because more people are interested in having them. If everybody that wanted one wanted to use their services then the supply would also increase leading to an increase in price.
The other thing that will help keep prices high is the high transaction fee that the pools charge. These transaction fees make it possible for users to get numerous coins without having to pay an outrageous transaction fee. Thus the perception is that the supply has been increased but the demand has not been decreased. This is a misconception because the supply cannot be unlimited and the demand has to be constant. If there are hundreds of thousands of users each using one hundred coins then we have a problem because the transaction fee must be lower for each individual and therefore the cost per transaction goes up.