With the third Bitcoin (BTC) halving in just four days, members of the global crypto community are excited how the event for the main crypto asset is financially resolved. Historically, halving has almost always had a positive impact on Bitcoin’s price, but this time around Many experts believe that a possible increase in value has already been assessed.
It should be mentioned that halving is likely will have the greatest impact on minerss, because lowering the reward ratio after the event quickly changes your profit streams and forces smaller players to do so Adjust your trades accordingly or close them completely.
Not only that, some experts have commented that the “offer shock” mentioned above could compromise Bitcoin’s security by causing a Rapid decline in miners’ hash power. With that in mind, Alex Heid, the research director of SecurityScorecard – an information security company that classifies corporate cyber security risks – believes that ransomware will increase as a result of halving, with criminals likely to use known vulnerabilities and phishing as a means of delivery. So How will the next halving affect general market sentiment and BTC’s reputation?
Traditional finances help Bitcoin
Given the current global corona virus pandemic, more and more people seem to believe that their local monetary systems are malfunctioning, especially as central banks like the US Federal Reserve continue to print every amount of fiat currency increases as part of the quantitative easing.
Also Many governments have given a huge boost to the introduction of digital payment systemsas well as other non-contact means of payment to comply with the social distancing measures that were considered essential at that time.
Due to the fact that the above-mentioned COVID-19 crisis coincides with the halving of Bitcoin, the image of the main cryptocurrency has improved somewhat in the eyes of investors, who are now beginning to better understand Bitcoin’s self-draining and decentralized design. Zac Prince, co-founder and CEO of BlockFi, told Cointelegraph that halving was a “perfectly matched opportunity for Bitcoin“and adds:
“”The current market dynamics are generating increasing interest in the long-term digital currency, which goes beyond a rudimentary understanding of the rules of supply and demand. In the past, past halving events have always led to a possible rally at BTC“”
Prince also said that with the Federal Reserve pushing money to keep the economy alive, More and more Americans are turning to Bitcoin for value reasons – to show their long-term trust in digital goods. Not only that, he also believes that bitcoin has recently been successfully recovered from its pandemic losses and more and more people are beginning to diversify their existing wallets. He added:
“”As more and more people see their value, we believe that the price of Bitcoin will increase steadily and sometimes rapidly in the coming years, in addition to the peripheral pressure on retailers“”
After all, the reputation of the ever growing Bitcoin market is based on the fact that Countries like India, Nigeria and Lebanon have seen increasing acceptance of cryptocurrenciesEspecially since the global stock markets have suffered significant losses in the past month and a half. And while in the past people tended to take refuge in the US dollar, the dollar itself may face uncertain timesAs a result, more and more people are taking refuge in various offers to protect their prosperity.
Capitalization institutions after halving?
Another interesting debate that has sparked interest among many is whether the next halving will help attract more institutional players.Especially when Bitcoin rises steadily after the event. In this sense, common sense suggests that if Bitcoin did indeed experience a sharp rise in value, the asset could join the rare commodity company like gold that investors believe not only serves as good value reserves but also offer investors the opportunity to hedge the economic risks associated with black swan events such as the coronavirus crisis.
John Cantrell, CEO of Juggernaut, a messaging service based on Bitcoin and the Lightning Network that offers end-to-end encryption, told Cointelegraph. A number of future-oriented institutions have already tried to understand Bitcoin’s value proposition and have therefore invested in the asset.. For the big players who haven’t paid attention to BTC, however, Cantrell believes the upcoming halving gives them a perfect opportunity to explore.
Similarly, Prince believes the cryptocurrency market is ready for an inflow of institutional money. On the subject, he noted that an incredible amount of infrastructure has already been set up to hold Bitcoin for private and institutional investors:
“”Traditional fintech retail platforms such as Square, SoFi and Robinhood have made bitcoin purchases available on their platform, and companies like Fidelity and Grayscale are developing products to support institutional acceptance.“”
Checkmate, co-moderator of the podcast “Rough Consensus” and research contractor for Open Source Autonomous Digital Currency Decred, takes a somewhat different view. He believes that Current volatility and the lack of a liquid derivative infrastructure to hedge risk have prevented large institutional players from entering this marketand said to Cointelegraph: “Institutes will come when the financial infrastructure and size make Bitcoin an invertible asset type“Halving probably has little to do with it.”
The market mood has already improved significantly
Amidst global economic uncertainty, cryptocurrencies seem to have grown in importance a hint of trust and legitimacy around you. In this context, eToro analyst Mathew De Corrado told Cointelegraph that since the last halving in 2016, his company has seen an influx of customers looking to add Bitcoin to their portfolio.
He noticed that too Many eToro customers have shown increased interest in cryptocurrency due to the increasing economic stimulus from governments around the world, especially since a large majority of cryptocurrency investors view these assets as a hedge against possible inflation. Future and devaluation of your national currency. De Corrado concluded with the words:
“”In my opinion, trust in crypto assets is largely caused by increased public visibility, government organizations, increased regulation and / or surveillance, and increased demand for crypto assets. institutional investors“”
Finally, Cantrell explained that his confidence and sentiment towards cryptocurrencies will increase as more people realize that Bitcoin has a fixed supply and a well-known production schedule – meaning that the asset cannot be spent at will at a fast pace.
Bitcoin’s reputation is not affected
As the halving approaches, it remains to be seen how BTC’s public perception will change after the event, as the currency may be so subject to price increase or short-term decrease. If Bitcoin is able to stay on the rise, it would help integrate the narrative that Bitcoin is not only a potential long-term investment path, but also a means of hedging the economic risks that typically arise when traditional markets collapse and fall due to unfavorable market conditions.
On the other hand, if the value of Bitcoin starts to decrease after halving, investor confidence may fluctuate. However, if the current market situation is taken into account, this effect may not last.
De Corrado believes that regardless of how BTC’s financial future develops after halving, the currency’s reputation is unlikely to be affected. However, he admits that a looming volatile future could offer investors the opportunity to trade with a likely increase in volatility, pending the supply side cut in the equation. He concluded:
“”For context, Bitcoin had one of the biggest weeks of the year with an increase of around 19.2% for the week through Sunday. With such a significant surge in a week, the big question will be how guilty it is to halve that surge and what investors can expect in the next 14 days.“”