Bitcoin Halving Could Be a Non-Event, According to Experts
The crypto industry has been rightfully buzzing over the last month about the forthcoming
Bitcoin (BTC) halving event, which is set to take place in a little more than two weeks.
To begin with, it's unquestionably one of the most — if not the most — anticipated
crypto events of 2020.
However, because to the COVID-19 pandemic, many analysts are dubious whether the event
will have a significant impact on Bitcoin's financial future.
It's intriguing to note that, whilst many different traditional assets have had their
prices plummet significantly since the beginning of March, Bitcoin has mainly been able to
withstand the massive amount of adverse pressure that has come its way and maintain its worth
above $7,000 level.
In fact, on April 23, the top cryptocurrency had a pre-halving pump, which saw the asset's
value surpass $7,500.
What are the prospects?
While all of the aforementioned factors point to a positive future for Bitcoin as an investment
vehicle, it appears as if the level of uncertainty may be much higher than in previous halvings.
Cointelegraph contacted Scott Freeman, co-founder of JST Capital, a financial services firm
focusing in the digital asset market, to gain a better grasp of the situation.
He stated that after speaking with numerous people working throughout the industry, including
miners and institutional buyers, the one consistent message he has heard is that the halving will
most likely be a non-event in terms of Bitcoin worth movement:
"The halving has been on everyone's radar for a long time, and as such, the impact on
markets should already be incorporated into the value of BTC."
The halving may have an impact on some miners' income, but we anticipate that at this point,
each miner has already made changes to their business models."
In a similar spirit, Meltem Demirors, the chief strategy officer of digital asset administration
firm CoinShares, joked with Cointelegraph that, like the rest of the economy, the Bitcoin
rally around the halving has been postponed until further notice due to the ongoing coronavirus
situation.
She did, however, add that her firm has observed a number of significant trends that have pushed
up demand for digital property.
According to Demirors,
"We see demand in the form of increased usefulness for Bitcoin outside monetary theory and an
increasing amount of institutional interest, while new derivatives markets are increasingly
raising costs."
Experts disagree about Bitcoin's future due to market uncertainty.
Historically, a Bitcoin halving event is usually accompanied by a lot of market buzz or fanfare,
which invariably helps push the currency's value upward.
However, things are very different this time around.
Cointelegraph contacted Jose Llisterri, co-founder of Interdax, a crypto exchange platform, to
further assess the flagship cryptocurrency's future.
He discovered that the value of the Bitcoin–US dollar pair has tended to approach its all-time
high 16 months after each of the previous having occurrences.
"If this trend continues, a new all-time high may be reached anytime around or around September
2021," he noted.
Not only that, but Llisterri also stated that after this future occasion, only the most
environmentally friendly miners would be allowed to operate, as the halving will virtually
double their operational prices in a single day.
Furthermore, if inefficient miners close down, a positive problem adjustment for the remaining
miners can be seen, implying that revenue margins will undoubtedly improve as well.
He continued, saying,
"What's different this time is that there's now a steady derivatives market, so the impact
of miners accumulating might not be as strong as it was during the bull runs in 2013 and
2017."
Futures and perpetual swaps allow purchasers and miners to hedge their holdings or speculate
on bitcoin's long-term worth path, allowing for true worth discovery."
In this regard, Ivailo Jordanov of 7percent Ventures, a United Kingdom-based venture capital
firm, feels that as a result of the ongoing fiscal stimulus, an increasing number of people
have been looking for property that is scarce in nature.
According to him, the Bitcoin halving will exacerbate the scarcity factor, making crypto
more appealing to the general public.
Similarly, Trent Barnes of ZeroCap, an Australia-based digital property and foreign exchange options
firm, believes that due to the number of variables that are currently in play, it is difficult
to provide an accurate forecast of how Bitcoin will perform in this current economic environment,
including:
"We expect strong short-term volatility following the halving, both on the upside and on the
downside."
Longer term, we expect value to rise in accordance with the stock-to-flow model.
I wouldn't be surprised if it flew under most people's eyes; in the meantime, the astute
buyers will continue to accumulate."
Finally, Fredrik Johansson, the founder of Libonomy – a blockchain ecosystem governed
by artificial intelligence — feels that in the past, halving events were frequently
accompanied by a lot of media excitement, exposing people to Bitcoin.
However, most buyers and crypto enthusiasts are already well-versed in Bitcoin, so irrational
monetary growth is unlikely this time.
Pundits believe that the information provided by Google Tendencies is worthless.
According to Google Trends, searches for the term "cryptocurrency" have decreased by nearly
half since June 2019.
However, experts such as Neel Popat, the CEO and co-founder of bitcoin funding platform
Donut, believe that such data is somewhat limited in its overall reach, as there are
a number of distinct indicators that may be used to evaluate shopper interest in cryptocurrency:
"Within the ecosystem, new development areas like to 'DeFi' are generating a lot of interest."
Many people get more thrilled when there are events and price spikes, so if one occurs
after the halving, that is the perfect storm for public curiosity."
Similarly, Emre Tekisalp, the head of enterprise development at O(1) Labs — the creators
of the Coda protocol — told Cointelegraph that, contrary to what Google Trends might
suggest, interest in cryptocurrency as a method of payment and fuel to power the modern-day
digital financial system has grown significantly among the general public, as well as among
governments and numerous establishments all over the world:
"The introduction of central bank digital currencies (CBDCs) will eventually raise public
awareness of decentralised alternatives such as Bitcoin and Ethereum."
Finally, Nick Hill, vice chairman of business development at asset management firm Invictus
Capital, feels that because of the massive stimulus packages implemented by governments
all over the world, discussions about how money is created in the first place have resurfaced.
This, in his opinion, will invariably prompt people to discuss cryptocurrency once more,
as well as how this distinct asset class might serve as a bulwark against unrestricted money
creation by central banks.
Bitcoin investor confidence may increase.
With traditional commodities such as oil and shares plummeting in recent months, with the
worth of the previous reaching an all-time low on April 20, it's worth considering whether
or not market confidence in connection to Bitcoin and the crypto trade in general will
rise in the coming months.
Tanner Philp, the head of business development at Kik — a social media messaging platform
— told Cointelegraph that it has been extraordinary to see market confidence remain high in relation
to Bitcoin despite the entire insane bearish pressure that the global finance sector has
seen over the last few months:
"I believe the capital flight in Bitcoin and crypto, in general, is less associated with
the halvening and more so a requirement for people to determine money positions in the
midst of a pandemic."
In my opinion, crypto will continue to be kept as a speculative asset for the foreseeable
future, but in order to become a multi-trillion dollar asset, it must move beyond that for
use as a currency.
"I believe the trade is progressing in that area."
In terms of whether or not purchasers have been more knowledgeable about Bitcoin, as
well as crypto know-how in general, it's rather evident that since the initial coin offering
bubble of 2017, people have become more mature in the way they assess many altcoins and different
associated crypto options.
Nonetheless, despite the fact that awareness is more than ever before, digital currencies
are still a long way from widespread use.
Nonetheless, many experts believe that in times of calamity — such as the current
one — new businesses and technologies might arise, and so now could be an excellent time
for cryptocurrency to demonstrate its benefits and attain universal use.
On the subject, Andy Ji, co-founder of Ontology — a public blockchain and distributed collaboration
platform — believes that, while Bitcoin's dizzying price highs in late 2017 and subsequent
drop gave people the impression that the asset is subject to uncontrollable volatility, Bitcoin
has recently reverted to a more normal pattern of development that has been relatively unaffected
by outside market fluctuations:
"Over the preceding twelve months, there was a heightened awareness among inhabitants of
the potential of Bitcoin, its key characteristics, and the Bitcoin-powered routes customers can
explore."
Every month, new swaths of sophisticated digital funds consumers emerge, bolstered in part
by the increased use of crypto and blockchain know-how more broadly amongst businesses with
family names."