Over the past month, the crypto world has understandably been full of talks about the upcoming halving of Bitcoin (BTC), which is expected to take place in just over two weeks. For starters, it’s undoubtedly one of the most, if not the most anticipated, events in the cryptocurrency industry in 2020. However, due to the COVID 19 pandemic, many analysts are still unsure whether the event will have a material impact on the monetary future of Bitcoin.
It is interesting to note that other traditional assets have seen dramatic depreciation since the beginning of March. However, Bitcoin was able to avoid the enormous downward pressure and keep its value around USD 7,000. In fact, on April 23, the major cryptocurrency in the market saw an increase before halving, when the value of the asset exceeded the $ 7,500 threshold.
What lies ahead
Although all of the above signs for Bitcoin as an investment vehicle have been positive, the element of uncertainty appears to be very high compared to previous halving.
To better understand the situation, Cointelegraph contacted Scott Freeman, co-founder of JST Capital, a financial services company specializing in the digital asset market. He explained that the only consistent message he heard after speaking to a number of people in the room, including miners and institutional investors, was that halving the price movement would be a non-event of Bitcoin :
“Halving has been on the radar screen around the world for a long time, and as such, the impact on the market should already be included in the price of BTC. Halving can affect the profitability of some miners, but we expect everyone to do so at this point Bergmann has already made adjustments to his business models. “
Similarly, Meltem Demirors, chief strategy officer of digital asset management company CoinShares, jokingly told Cointelegraph that Bitcoin’s focus on halving, as in the rest of the economy, has been lifted. until further notice due to the current situation of the corona virus. However, he added that his company has seen a number of important changes that have fueled increasing demand for digital assets. Demirors said:
“We see demand in the form of increasing Bitcoin benefits beyond financial speculation and growing institutional interest as new derivative markets drive prices higher.”
Market uncertainty tells experts about the future of Bitcoin
Traditionally, halving bitcoin is usually followed by a lot of advertising or fanfare in the market, which without exception helps to push up the price of the currency. However, this time it looks very different.
To better assess the future of the cryptocurrency flagship, Cointelegraph turned to José Llisterri, co-founder of Interdax, a platform for cryptocurrency exchange. He noted that the value of the Bitcoin-US dollar pair tended to approach its all-time high 16 months after each of the above events. He added: “If this trend repeats, a new all-time high can be reached sometime around or after September 2021.”
Not only that, Llisterri also emphasized that after this next event, only the most efficient miners can continue to work, as halving will double operating costs almost overnight. Once inefficient miners close, there will also be a favorable level of difficulty for the remaining miners, which may also improve profit margins. He added:
“What is different this time is that there is now a strong derivatives market, so the impact of mining may not be as strong as it did during the 2013 and 2017 bull runs. Derivatives like futures Through constant exchange, investors and miners have the opportunity to share theirs Securing positions or relying on the future price development of Bitcoin, which can be used to determine a fair price. “
In this matter, Ivailo Jordanov of 7percent Ventures, a UK-based venture capital firm, believes that with current tax incentives, more and more people are looking for assets that are inherently scarce. In his opinion, halving Bitcoin will add to this scarcity element and may make cryptocurrencies more attractive to the masses.
Similarly, Trent Barnes of ZeroCap, an Australia-based digital asset and exchange solutions company, believes that the number of variables currently in play makes it difficult to accurately predict Bitcoin’s behavior in the game due to the number of variables currently in play Climate. current economic, add:
“We expect strong volatility in the short term after halving, both above and below. In the long term we see a price increase in line with the stock-to-flow model. Actually, I wouldn’t be surprised to see how it flies under the radar of the public In the meantime, smart investors will continue to build up in the fund. “
Finally, Fredrik Johansson, the founder of Libonomy – a blockchain ecosystem regulated by artificial intelligence – believes that the halving events were previously generally accompanied by strong media publicity, which resulted in people being exposed to Bitcoin . Most cryptocurrency investors and enthusiasts are now familiar with Bitcoin, which is why this time may not be a senseless financial boom.
Experts believe that Google Trends data doesn’t make sense
According to data available in Google Trends, searches for the term “cryptocurrency” have decreased by almost 50% since June 2019. Experts like Neel Popat, CEO and co-founder of the cryptocurrency investment platform Donut, believe that this data is fairly limited in its general scope as there are several other indicators that can be used to measure consumer interest in cryptocurrencies:
“There are new growth areas within the ecosystem like ‘DeFi’ that are generating great interest. In terms of mass, they tend to become more excited about events and price increases. If this were to happen after halving, it would be.” the perfect storm for general interest. “
Similarly, Emre Tekisalp, head of business development at O (1) Labs – the developer of the Coda protocol – told Cointelegraph that, unlike Google Trends data, curiosity about cryptocurrencies is a means of paying and fueling them Modern digital economy has increased significantly in public, as well as with governments and various institutions around the world:
“The use of digital currencies issued by central banks (CBDC) will ultimately raise public awareness of decentralized alternatives like Bitcoin and Ethereum.”
Finally, Nick Hill, vice president of business development for the wealth management company Invictus Capital, believes that with all the important stimulus packages that governments around the world have put in place, talks will continue on how money is created. In his opinion, this will invariably lead to people talking again about cryptocurrencies and how this single asset class can serve as a bulwark against the unrestricted creation of money by central banks.
Investors’ confidence in Bitcoin can increase
Given that traditional commodities such as oil and stocks have fallen in recent months and the value of the former reached its historic low on April 20, it is worth analyzing whether an increase will occur in the coming months. market confidence in Bitcoin and the cryptocurrency industry in general.
Tanner Philp, head of corporate development at Kik – a social media messaging platform – commented on the subject and told Cointelegraph that it was extremely impressive to see that despite Bitcoin, the market sentiment was still high compared to Bitcoin, all of the crazy ones Downward pressure the global financial sector has experienced in recent months:
“I think that capital flight in Bitcoin and cryptocurrencies is generally less correlated to halving than to the need for people to build cash positions in the middle of a pandemic. In my opinion, this is largely the case. Cryptocurrencies are still a speculative asset, but with it if they can become a multi-million dollar asset, they have to go further to be used as a currency. I think the industry is making progress in this regard. “
Whether investors have been informed more about Bitcoin, as well as cryptocurrency technology in general, is pretty clear that since the ICO bubble in 2017, people have become more mature as they rate various old coins and other related crypto offerings.
Although awareness is greater than ever before, digital currencies are realistically far from universal acceptance. However, many experts believe that in times of crisis – as in the current one – new companies and technologies can emerge. Therefore, it could be a good time for cryptocurrencies to show their benefits and gain broad acceptance right now.
On this issue, Andy Ji, co-founder of Ontology – a public blockchain and distributed collaboration platform – believes that Bitcoin’s dizzying price hikes in late 2017 and the subsequent crash gave the impression that the asset was recently closed due to uncontrollable volatility returned to a more regular growth pattern that was relatively unshakable due to fluctuations in the external market:
“In the past twelve months, citizens have become more aware of the potential of Bitcoin, its core attributes and the ways that Bitcoin users can follow it. Now there are new swathes of intelligent digital payment users every month. This has been partly due to the stronger application of blockchain technology and cryptocurrencies for companies with well-known names. “