How Coronavirus Can Affect Bitcoin Halving: What Can We Expect?
In anticipation of the Bitcoin halving, analysts were puzzled by the question of how the flagship cryptocurrency will behave in the context of the global “force majeure”, which the pandemic has become. The spread of COVID-19 has made adjustments to the everyday life of the whole world, a state of uncertainty has become the norm for financial markets over the past few months.
Will half Bitcoin stand up to the consequences of COVID-19?
The spread of COVID-19 did not bypass the cryptocurrency market, even though the crypto is positioned as a decentralized asset. 2020 began for the cryptocurrency quite favorably: in February, the price of Bitcoin reached $10,000. The massive spread of coronavirus beyond the borders of China affected the market condition of cryptocurrency. In early March, Bitcoin was already trading at $8,000.
“Black Thursday” March 12 has already entered the history of Bitcoin, as the day of the punishment of a digital asset. Then the price of BTC fell sharply below $4,000. Along with the drop in value, confidence in the flagship cryptocurrency collapsed, the belief that it is resistant to market conditions was questionable even among the adherents of digital gold.
Despite criticism, Bitcoin was able to get out and already at the end of April was trading in the range of $7300 – $7500. The real breakthrough occurred in early May when BTC made a breakthrough and exceeded the $9,000 mark.
The sharp fluctuations in the price of Bitcoin up and down have occurred over the past 3 months. This suggests that we cannot foresee exactly how the flagship cryptocurrency will continue to behave. Some analysts believe that the lack of this understanding “knocks the earth” from under the feet of investors and traders, chaos will continue to reign in the crypto industry.
Ryan Watkins, an analyst at Messari, believes that COVID-19 could be a powerful obstacle to the new Bitcoin breakthrough that was supposed to happen after the halving. He noted:
“Halving Bitcoin for the first time in history will take place in an uncertain macroeconomic environment, which could well take up and exert powerful pressure on the crypt.”
Crypto analyst Matt Weller is more optimistic about the current situation and urges not to succumb to general panic. He noted:
“Do not forget that halving Bitcoin is a long-planned event. The reduction in supply a priori stimulates the growth of demand for the asset. We can only wait. ”
A bit about halving Bitcoin
The division is halved in the concept of Bitcoin by it’s “father” Satoshi Nakamoto. Halving was first held in 2012. Then the miners for each new block received 50 BTC. After 2 previous halvings, the reward was reduced to 12.5 BTC. In just a few days, we will witness a new landmark event, when the reward will be reduced to 6.25 BTC.