Preface:

There are many factors involved in the price of BTC and it's impossible to know them all. The following analysis is to try to isolate the effect of halving the block rewards on the supply side. This analysis is not meant to be a prediction of price. There are some factors that are left out for simplicity. Some assumptions are made for simplicity sake. Also, I am not an expert. I expect someone to find flaws in this methodology, please share them.

Assumptions:

• sell pressure from mining is an immediate effect.
• For price to remain stable, buy pressure = sell pressure
• For price to remain stable, buy pressure must always be increasing relative to sell pressure to match additional bitcoins mined/ sell pressure from mining
• Market cap can be used as a rough measure of demand

Notable errors in analysis:

• Bitcoin price is highly speculative and many factors may be priced in, manipulated, or left out. It's impossible to know the actual "worth" of bitcoin. Market cap is not a realistic measure of demand
• Price stability is not realistic
• Some amount of bitcoin supply does not exist in any usable or recoverable state
• Sell pressure comes from other sources besides mining. A steady increase in buy pressure relative to sell pressure is not realistic.

Analysis

Price point for analysis = $37,000 per BTC Current supply of BTC = 19,543,818 Market cap at $37k = $723 B Previous all-time high = $68,790 Market cap at $68,790 = $1,344 B Difference in market cap from current price to ATH = $621 B Current reward per block = 6.25 Value mined per day = $33.3 M New reward per block = 3.125 New value mined per day = $16.7 M 

Mining bitcoin inflates the supply, devaluing BTC by a total of $33.3 M per day. Spread across a supply of 19,543,818 coins, the effect is a devaluation of ~$1.70 per bitcoin per day. After halving the sell pressure will be reduced by $16.7 M per day and the devaluation will be reduced to $.85 per bitcoin per day.

Assuming a constant increase in BTC demand of $33.3 M per day (the amount required to have an equilibrium at $37k price point), the halving will cause a surplus of demand of $16.7 M per day. The difference in sell pressure with a steady rate of buy pressure will mean bitcoin will increase in price by $.85 per day.

Conclusions

$16.7 M surplus buy pressure per day would increase the market cap to the all-time high value in 37,314 days or 102 years.

In terms of rate of return, $.85 per day is $310 per year, which is a 0.8% annual increase on the price of bitcoin.

The relieved sell pressure from the halving is not enough of a driving force to push the price towards the all time high. Significant demand side forces will be required to increase the price to previous levels.