Analysts are predicting that April of 2020 could be a huge month for bitcoin and all its “offshoots.”
Will the Halving Help or Hinder Bitcoin?
Bitcoin is set to undergo a halving event in May, which up to this point, was slated to stretch the currency’s price beyond the stars and give it immeasurable power. However, as of late, the currency’s price appears to be gasping for air thanks in large part to the coronavirus-related panic that has brought down the world’s financial markets these past few weeks.
At press time, the world’s number one cryptocurrency by market cap has surged to $7,300 from the lowly $3,800 it was trading for briefly during mid-March. While this is a major improvement over where it was, it still has about $3,000 to go if it’s going to strike the $10,350 range it was originally trading at last February.
The halving has got everyone scared. With the price of bitcoin already down and miners suffering low-end rewards as a result, many are wondering if the event next month will potentially cause the currency to fall into oblivion or make its mining arena obsolete. In addition, bitcoin’s halving will be preceded by two additional halvings: one for bitcoin cash (BCH) and one for bitcoin SV (BSV).
Discussing the latter, researchers at Arcane stated:
There is a real risk that the hash rate might be temporarily halved on both the bitcoin SV and bitcoin cash networks until the bitcoin halving in May, unless the price of the coins or the transaction fees of the networks increase significantly relative to bitcoin.
In other words, there is great potential for the halvings surrounding both BCH and BSV to weaken bitcoin even further before it undergoes its own alterations.
By contrast, Danny Scott – the chief executive of crypto exchange Coin Corner in the U.K.’s Isle of Man – commented that he thinks the halving could potentially give BTC the boost it needs to come out of this COVID-related funk for good. He believes the currency could easily reach its all-time high of $20K again once the event is complete.
As the third halving event to occur, there are expectations for what might come after, with history telling us that the bitcoin price will typically begin to rise significantly within the 12 months following a halving. Something can be simply put down to supply and demand.
A Powerful Tool
Guy Hirsch – managing director of e-Toro – says that the halving seems to have everyone bullish about BTC, as the exchange has garnered a handsome array of new customers over the past few weeks. He explains:
There is growing consensus that due to the Fed announcing unlimited quantitative easing, investors could soon be looking to bitcoin as an inflation hedge against a depreciating dollar.