Investors are eagerly awaiting the Bitcoin Halving expected on 13 May and its impact on the price development at BTC. Meanwhile, Bitcoin Cash (BCH) has already been halved during the night and Bitcoin SV (BSV) will be halved in the early hours of tomorrow.
Bitcoin Halving is a date for investors with background knowledge, which must be marked in red in the calendar. It should be on May 13th at BTC, the main purpose of halving is to combat inflation. However, experts also expect significant price movements around the cut-off date, and optimists such as the analysts of Bayerische Landesbank are even forecasting highs for BTC of around USD 90,000 this year. Somewhat forgotten are the halvings for Bitcoin Cash (BCH) and Bitcoin SV (BSV), two crypto currencies created by hard forks on the largely identical technological basis of BTC. In the case of BCH, the halving happened last night, while in the case of BSV it is expected to happen on Friday night. Findings from this are of particular interest to you as an investor.
Halving at BCH and BSV – what does this mean for BTC?
Let’s first look at BCH, the fifth most important crypto currency by market capitalization. Shortly before the halving, the price of BCH rose significantly by a good 7 percent, while after the halving it is currently losing slightly. The price fluctuations were and are therefore noticeable, but not as marked as in negative scenarios.
BSV appears to be imitating these curves with a time lag, and the price of the number 6 most important crypto-currencies in terms of market capitalization is still rising. It would therefore hardly be surprising if the price of BSV were to fall moderately again after the halving. You can follow the countdown for the Bitcoin SV Halving in real time here.
As with Bitcoin itself, Halving means the reduction of Block Rewards from 12.5 to 6.5 in the respective crypto currency. This is intended to keep the inflation rate below 2 percent and ensure that BTC or BCH or BSV remain a rare commodity comparable to gold or silver. The exciting question now is how the Mining Pools will behave. They can switch their computing capacities between Bitcoin and its follow-on currencies quite easily and thus mine in the crypto currency that promises the greatest profits. In an analysis by Arcane Research, this situation is expected to actually occur and there will be considerable shifts in the hashrates of the block chains of BTC, BCH and BSV by May 13.
As a result, the experts conclude that there is less risk of radical double-digit price jumps, but explicitly warn against the risk of 51 percent attacks on BCH and/or BSV. The assumption behind it: At the moment, mining at BTC is still the most profitable and therefore the miners are switching to BTC by the deadline of 13 May. BSV also had to deal with irregularities in the blockchain in 2019. A successful 51 percent attack on an Altcoin has the potential to permanently damage trust in the affected crypto currency.
Bitcoin Halving – already priced in or ticking time bomb?
The price of BTC is currently fluctuating slightly around the halvings of BCH and BSV, but by far not as strongly as in the offspring. BCH has not yet fully recovered from the losses of “Black Thursday” on 12 March, but the curve is slowly but steadily pointing back towards the USD 8,000 mark. At best, a glance into the crystal ball would reliably predict whether at such values the Bitcoin Halving is already priced in for the future or whether an upward spiral will develop as after the last BTC Halving in 2016. Analyst Charles Hwang, for example, has also presented an exciting explanation for the positive scenario. On the other hand, the economic effects of the coronavirus crisis have not yet played a role in the model calculations for Bitcoin Halving, but BTC is not completely unaffected by this. You can keep an eye on the BTC countdown to halving here.