Experts say the next Bitcoin halving may not bring price changes
The next halving of the Bitcoin network will take place in May 2020 and, contrary to what many believe, some analysts believe that the event may not have an immediate effect on the price of the digital asset. The Bitcoin network lives a halving every four years or so. During the expected event, the reward generated for the miners of each block (generated every 10 minutes) is reduced by half.
This causes the entry of new Bitcoins in the market to fall in the middle of one day to another, causing a shock of supply in the digital asset market.
Will the price of Bitcoin fall to the 5k zone before the next halving? The expert’s opinion
Many analysts believe that this is a positive factor for Bitcoin, as the event emphasizes the scarcity of digital assets – which normally attracts greater demand from investors. Despite the optimism, halving may not have a dramatic impact on its price. Some analysts believe that the event will not affect the price of the digital asset.
Former eToro senior market analyst Mati Greenspan spoke about the event: “My feeling is that the next halving is priceless. My best estimate of the bearish action we saw in the second half of 2019 is due to a war in course among cryptocurrency miners. In recent months there has been a round of new technologies that make old mining platforms obsolete. So miners who hid their Bitcoin in the bull run have sold some to improve their equipment. “
The CoinShares CSO, Meltem Demirors, said there is a very real possibility that the price of Bitcoin will not rise after living the halving. In a recent tweet, Demirors stated: “For the first time, there is a robust derivatives market [futures, options] for Bitcoin. Most companies that want to speculate with Bitcoin trade with a derivative, not the underlying asset.”
Demirors believes there has been significant growth in the Bitcoin market and in the cryptocurrency derivatives market. He stated that these new ways of investing in Bitcoin can keep the price of assets after halving.
The CSO of the analysis company said that when the derivatives sector “takes off”, producers (miners) lose the right to set prices. According to this, the price of Bitcoin would be separated from its value (supply and demand), and would become a more invertible asset.
“The Bitcoin halving has already been specified by the miners,” says one of the founders of Morgan Creek
But not everyone agrees with this view. Jack Mallers, a Bitcoin developer (currently working at Zap, a company focused on the Lightning Network), whose father and grandfather worked in the derivatives industry, disagreed with Demirors.
Mallers admitted that derivatives help market efficiency and overall price determination, but said these financial instruments do not affect the simple dynamics of supply and demand.
Mallers also explained that derivatives traders never set the price of an asset, but rather the dynamics of supply and demand. According to him, it is impossible to predict how demand will react to the new offer when there is a crash in the asset market (such as halving).
Disclaimer: This press release is for informational purposes information does not constitute investment advice or an offer to invest. The views expressed in this article are those of the author and do not necessarily represent the views of infocoin, and should not be attributed to, Infocoin.