Bitcoin Climbs Back Over $7,350 USD, But is the BTC Halving a Much-Hyped “Bullshit” Narrative?
The third Bitcoin reward halving is scheduled for May 2020, in less than five months that will cut down the supply. Currently, 1,800 Bitcoins are generated per day but starting May 14, only half of these will be mined per day.
Halving is considered as the catalyst for the Bitcoin bull runs. But we have already experienced two halvings, would this third halving be any different?
According to some, it would be a non-event.
Unpopular Opinion –
Bitcoin halving in May 2020 won’t do anything to the price. It will be a non-event.
— Jason A. Williams 🦍 (@JWilliamsFstmed) December 1, 2019
Bitcoin needs bigger macro catalysts than halving
Ryan Selkis, the founder of Messari, a crypto research and data platform published a Crypto Thesis for 2020 talks about the much-hyped “halving” narrative which he says is “bullshit.” This is because the “magnitude of the decline in new issuance as a percentage of market cap is tiny.”
The last two bull market of 2013 and 2017 were driven by “new types of buyers,” wrote Selkis.
“The halving only matters as a self-fulfilling prophecy” and makes sense for high inflation assets, he said.
But is it really priced in because the information is known upfront? Selkis notes that crypto markets aren’t rational, not really. But according to him, Bitcoin needs bigger macro catalysts than this two-point reduction in inflation rates.
FOMO will kick in
“Everyone forgets the halving. As we head into the halving, fomo will kick in,” is what Johnny Dilley of Mempool Partners sees happening.
After halving, ~50% of all newly mined Bitcoin will be absorbed by just two companies: GBTC and Square
This ignores the 30million Coinbase customers, people investing via RobinHood, eToro, etc. etc
… but tell me again how halving is priced in.
— Alistair Milne (@alistairmilne) December 21, 2019
This Bitcoin reward halving would have a “much larger impact” on the players in the mining industry, Thomas Heller, Head of Business Development for F2Pool told Global Coin Research team.
Forward-looking mining operators have already transitioned to new-generation hardware, which he said means inefficient mining operators will be squeezed out in 2020.
Apart from miners, this halving will also see growth in Bitcoin’s second layer solution Lightning Network and several UX improvements, according to Mohamed Fouda, of Token Daily Capital. Also, “the third halving dynamics will be significantly different from the previous two halvings.”
What are the expectations for BTC price?
Crypto commentators are still bearish on Bitcoin price next year but Yele Bademosi from Binance Labs is expecting the lowest price of BTC in 2020 to be higher than the $3,300.
Kelvin Koh, co-founder and Managing Partner of Spartan Group, however, has a bullish prediction, “BTC price will hit $40K during 2020.”
Binance founder and CEO Changpeng Zhao sees “high volatility in the short term.” On a 5 to 10-year horizon, “we’re very confident that bitcoin and cryptocurrencies are here to stay. In fact, blockchain will have a bigger impact on society than the internet. The industry will get bigger and when the industry gets bigger the price will go higher. We are also seeing an increasing amount of interest from institutional players which also indicates a more bullish market in 2020.