A new halving in the BTC supply is about to happen in a couple of minutes, and the expectations for it are immense between traders, investors, and miners all the same. This Halving would be the third since the appearance of Bitcoin in 2009, the other two occurring in 2012 and 2016. The opinions on how the market will react after the Halving between those involved in the cryptocurrency market are varied. In general, they seem to be very optimistic about the upcoming events, although few still believe that outcome won’t be as positive as they say.
What is BTC Halving?
When Bitcoin was launched, it was established that there would be a limited number of this asset that people could mine. Once they reach that number, there will be no more mining. This measure prevents speculation, transforming the cryptocurrency into a stable value that can be regulated and accounted.
The concept of Halving is as follows: the amount of bitcoin that a person can mine in a specific time will be half of what it used to be, and it will need to spend the double of resources to obtain it. That way, the bitcoin will keep circulating for many years before reaching the limit, helping the flow of the market. These Halvings are done every four years.
Miners prepare for the Halving
The last weeks, traders and investors have seen in the market how miners stopped selling Bitcoins, and it is clear to guess that they are waiting for the predicted rise of the prices once the Halving occurs. Many factors of the upcoming event seem to strengthen this thought. There is evidence of the changes in the market value of Bitcoin after the previous halvings. At first, the numbers seem to drop, but then it gains value and stays up.
Another critical factor is that in countries where Bitcoin mining is compelling the rain season is about to start, which will help to produce enough energy to run the machines with low costs. The electrical bill is one of the most significant risks in Bitcoin mining, which make access to Bitcoin difficult for those without the resources to mine.
Miners located in China, which is one of the major countries in Bitcoin mining, will enjoy the benefit of low costs electricity and the rise of the price of the Bitcoin that will come after the Halving. It appears that the strategy that smart miners are about to use is to wait and hold their BTC for the next ten months after the event when the value of the asset would stabilise once more.
However, Halving will also define the kind of miners that will continue working. Some small miners will need to update their conditions to mine and modify their resources to compensate for the loss it will represent, or abandon the activity for good.
Unexpected advantages in crisis
Coincidentally, the Halving date is mixing with a world crisis that is making many companies and institutions to recur to digital currency. The COVID-19, a virus that has been spreading rapidly in the last months, forces people to stay isolated in their homes and avoid all possible contact. Online stores are now more appreciated, and many fiat stores are changing the way people can make purchases. Digital technology is essential in this time of need, which could be the boot that cryptocurrencies needed so trustful companies could support it.
Support for Bitcoin has been a dilemma for many years. BTC is a decentralised system, which means that no base can support it if it crashes. This factor makes Bitcoin an unreliable asset, and its value is not stable. With this new necessity, companies are being forced to evaluate the advantages of using cryptocurrency.
What the experts think
Before relying on the rumours and speculations, traders and investors are looking to the predictions that different Bitcoin market charts are showing these days. If compared with the previous Halving, people can see that the bitcoin system is more reliable than it was four years ago. Thanks to Blockchain technology, making transactions with cryptocurrency is faster and safer than using bank transfers or credit cards. People can make purchases in different countries without having to change their currency into another, with all the exchange taxes. Overall, the changes have been positive for the cryptocurrency world. Those who doubted about its impact on the global economy are giving it an opportunity as an alternative to other financial tools.
The future looks bright for the Bitcoin even after the Halving. The date couldn’t have appeared more conveniently, where many factors are giving Bitcoin and cryptocurrencies, in general, the opportunity to raise as a useful and necessary asset to traders and investors. More and more companies are starting to validate it, which will allow them to become a stable currency, with support from many trustworthy companies that will be able to give it the base it needs, and not stay a volatile asset.
However, nothing can be taken for granted. As the time of the new Halving arrives, predictions and speculations are more favourable for traders, investors, and miners all the same, but the situation with Bitcoin has to be studied carefully. It is possible that during the first weeks after the event, many miners will try to sell their Bitcoin fearing the loses, or knowing that they wont be able to maintain their mining job. It is common that people react with panic and make poor choices in the financial markets. Hopefully, this time traders and miners are prepared and know what to expect for this new Halving, and the predictions will go as intended.
And even though this event is essential and expected for many, we mustn’t forget the effect that the COVID-19 will have in the future economy, where many companies had to close and may not open again once the viral crisis is over. Hard times may be coming in the financial panorama, which may represent changes in the way the bitcoin market will behave in the following months.