The probability of bitcoin rallying sharply after the May 2020 mining reward halving is quite low, according to the options market. 

As of Jan, 21, the options market was pricing only 32 percent odds of bitcoin ending June above $10,000. Meanwhile, the probability of prices finding acceptance above $20,000 was only 4 percent. 

Halving priced in?

Reward halving takes place every four years and reduces rewards per block mined by 50 percent. 

Currently, miners receive 12.5 BTC per block. That number will drop to 6.25 BTC per block after May.  Essentially, significantly fewer bitcoins will hit the market after May, possibly creating a supply deficit. 

That possibility, however, has been priced in by the markets, Jihan Wu, co-founder and ex-CEO of Bitmain, told CoinDesk in October. 

“People speculate too much before the halving, and then you can’t sell the good news anymore. Maybe, this time a bullish cycle is not coming yet,”said Wu. 

Markets have been discussing halving – a historically price-bullish event – for over a year now. So, it's quite possible that the event was priced in the second quarter of 2019 when the cryptocurrency rose from $4,000 to $13,880.

As a result, the event could turn out to be a non-event. Options market does think so, as noted earlier. 

That said, the probability of bitcoin making a convincing move above $10,000 by the end of June would improve if the recent uptrend continues. 

At press time, bitcoin is trading at $8,400, representing a 17 percent gain on a 24-hour basis.