How the Bitcoin halving will affect BTC prices in the short term

Bitcoin (BTC) has been trading below the level of US$8,000 for only two months, and it is expected to be halved in May. However, in the past few weeks, due to the coronavirus outbreak, the market has collapsed, and investors have already used their digital assets (including Bitcoin) to cash out. Will this affect the effect of the halving?

The upcoming halving may have a negative impact on BTC prices

According to the current market outlook, the halving in May 2020 may have a negative impact on the price of BTC.inside 2012 and 2016 halving events, BTC prices fell Before and after the halving, as we approach May, the same is expected.

A hypothesis emerged that miners usually sell their holdings before the halving so that they can accumulate enough Bitcoin to facilitate operations after the halving. This allows miners to keep most of the bitcoins they mine. Considering that the break-even price of Bitcoin mining usually peaks at the halving, this move will benefit miners.

TradeBlock’s James Todaro expects break-even price to jump from $7,000 to Between $12,000 and $15,000 after the halving. He added that BTC prices may rise above these levels and miners can get more profits. Dutch analyst Michael van de Popper also stated that in the short term, if the cryptocurrency retests $8,700 and successfully holds it, it may rise to $9,150.

Miners can get the same return by halving

Halving events usually reduce the amount of BTC that miners can mine. As the fixed supply of Bitcoin approaches 21 million, miners may be halved for the same amount of work and earn less income. Similarly, if the price of Bitcoin fails to rise significantly after the event, and mining difficulties still exist, there may be a higher break-even price, but the benefits are the same as before.

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This year, BTC has proven to be inversely proportional to the stock market and gold. Despite the risk transfer or risk transfer nature, the coronavirus outbreak has led to a massive sell-off of assets. Bitcoin has always moved by reacting similarly to macro events like other markets.

Featured image: DepositPhotos©AntonMatyukha

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