What Will Happen Now That the Halving Is Over?
For some, the news of the halving doesn’t mean much, and they predict that bitcoin will remain relatively unaffected in the short run. However, they do believe that things could ultimately turn uber-bullish in the coming months. This is a sign of bitcoin’s potential growth and maturity.
Garrick Hileman, head of research at Blockchain.com, said in an interview:
It is a different world in 2020 than it was during the last two halvings. The derivatives market is much larger and more important. One way I would say the market has changed is that historically the trading market was more lopsided toward upward transactions because there were not as many ways to speculate on the price going down, for example, the ability to borrow and sell short. That’s something that now exists through futures and options. So, all these products have created a more level playing field for people who want to bet on the price going down… When you dig into the options data, it looks like the market is placing a premium on contracts that are below the current prices. The options market seems to be suggesting that there is more concern over prices moving downwards.
Diego Gutierrez Zaldivar – CEO of IOV Labs – offers similar sentiment and claims that this halving event is considerably different from the ones that occurred in 2012 and 2016. He explains:
While the reduction in bitcoin’s renewed supply due to the halving introduces the possibility of a sharp rise in BTC’s price, it is possible that smart institutional money will push prices down in the short-term, as it did when CME and CBOE introduced their futures in December of 2017.
Meltem Demirors – chief strategy officer at Coin Shares – believes that the biggest change occurring in the space today is that bitcoin miners are looking to potentially revamp their operations and adapt to the present conditions. After all, the rewards they’ll be garnering for extracting new bitcoin blocks are now being considerably reduced.
How Are Miners Reacting?
In a recent interview, Demirors states:
I think miners are looking to opportunistically offload some of their bitcoin inventory to add operating capital to their balance sheet. We’ve been talking to several miners on Coin Shares’ capital broker-dealer side who are looking at raising capital to build out new facilities, to buy new machines and to extend their capacity. We’ve seen a lot of miners engaging with our capital market trading desk and looking for ways to manage and hedge their risk and lock in sort of an OPEX and develop a risk hedge portfolio strategy for the bitcoin they have on their balance sheet so that they can meet their operating costs and reduce some of the inevitable volatility that is going to come to miners around this event.