The halving for bitcoin is still months away, yet many analysts are still deeply divided on where the event will take us. Is the currency likely to go up as it’s done in the past, or will things remain as they are?
Will the Halving Do Anything for the Industry?
The rewards garnered by bitcoin miners will be cut in half, and the currency is set to become much rarer. Something that’s rare is likely to have a lot more value than something that’s common, but several industry leaders still believe that the halving has already taken these factors into account, and that enthusiasts are set to be disappointed when the month of May rings in.
Nic Carter – co-founder of Coin Metrics in Boston – recently explained in a statement:
Unlike most [bitcoin fans], I don’t think the halving is particularly bullish. I am of the view that most people with a bitcoin position understand that it’s capped in supply, so the issuance change shouldn’t make a difference. Also, the halving is perfectly forecastable, so I have a hard time believing that it constitutes an informational shock. Bitcoin supply has been described and understood from January 2009 and has followed the ordained trajectory ever since.
Scott Freeman, co-founder of JST Capital, echoes the sentiment of Carter, and believes that the halving will have already been factored into the present market. He explains:
If one believes in efficient markets, one could argue that the effect of the halving should already be priced into the market. We continue to believe that the price of BTC will be driven more by an increase in the number of new entrants into the market. We feel that many miners are operating profitably at current prices, but that the less efficient miners will be under pressure once the halving occurs.
Freeman brings up a solid point, and one that should ring some bells – especially amongst experienced traders. The market’s validity and performance are based largely on the number of new people entering it, so if people aren’t trading enough, it doesn’t matter if the halving occurs or not. The industry is likely to suffer down the line.
This was introduced through Arcane Research, which recently stated in a new report that bitcoin daily trading volumes were too low.
Some Think Big Change Is Coming
By contrast, Kyle Samani – co-founder of Multi-Coin Capital Management LLC in Austin, Texas – comments that the halving is likely to do wonders for the industry and cause massive change for the price. He states:
The halving is the largest Schelling point for trading in the history of crypto, and unlike past halvings, there is a lot of leverage available today that wasn’t available four years ago. A huge Schelling point combined, with lots of leverage – both long and short – means there will be a lot of volatility.