Bitcoin Halving 2020, eagerly awaited by the crypto market, is history. On Monday evening, at Block 630,000, the following mechanism started at BTC approximately every four years. Bitcoin’s share price hardly reacted noticeably to the event so far.
Whether the Bitcoin Halving inventor Satoshi Nakamoto took the Olympic Games or the soccer world championships as a model with the specified four-year cycle is not known. But the suspense in the run-up to the event was comparable to such major events, at least among crypto dealers. Yesterday evening, Monday, Bitcoin Halving finally went unspectacularly over the stage. At Block 630,000 in the block chain of BTC, the code automatically changed by a few numbers as planned. From now on, Bitcoin miners will receive only 6.25 BTC per new block as a reward instead of 12.5 as in the four years before. At least for the moment, Bitcoin Halving, which has been stylized for the event, has had little effect on BTC’s share price, and just before and after the Halving, BTC is quoted at a fairly stable level of 8,700 US dollars. Will it stay that way? We recall price forecasts for Bitcoin, which have the potential for headlines.
Where does BTC’s price go? Do forecasts stand up to reality?
In German-speaking countries, an analysis by the German Bayerische Landesbank has been widely quoted in connection with Bitcoin Halving. They had predicted a BTC price of around USD 7,500 at the time of the transaction and then expect a price rocket that should lead to a new all-time high of around USD 90,000 by 2020. BayernLB’s forecast is based on the stock-to-flow theory, which makes price explosions probable in the case of rare stocks and rising demand. It is assumed here that BTC, as “ultra-hard money”, is catching up with gold as a store of value due to the shortage of Bitcoin Halving, and is therefore still largely undervalued by market participants.
Anthony Pompliano, co-founder of Morgan Creek Digital, blows a similar horn in English. He sets the target price for BTC at USD 100,000 for 2021 and justifies this with Bitcoin Halving as the driving factor. Analyst Charles Hwang also believes that demand for BTC is driving the price to new all-time highs due to the artificial shortage of new Bitcoins after halving. He sees 50,000 US dollars in 2020 as realistic.
In the competition for the biggest Bitcoin optimist, however, at least three celebrities are engaged in a tough battle. On Twitter, crypto trader Alex Krüger sees 10 million US dollars per BTC as possible and 400,000 US dollars as basically guaranteed, albeit only after the next halving in 2024.
After breaking resistance at $9,000, it looks like in 5 years bitcoin will be between $10 million and $400,000. Unless price breaks back down below $9,000, in which case support will be at $4,500. Are you ready for it? pic.twitter.com/8e85edw5AW
— Alex Krüger (@krugermacro) May 8, 2020
With technical analyses, Raoul Pal, a former Goldman Sachs hedge fund manager, comes up with either 40,000 US dollars or 1 million US dollars as the price of BTC to be expected in the near future, i.e. Krüger’s forecast divided by a factor of 10. Pal also shares his assumptions on Twitter. Third in the group is John McAfee. He has already set himself a price target of 1 million US dollars per BTC in 2017. If he is wrong, he will “eat his own penis (“thick”)”. As far as is known, he has not kept this promise, but he is sticking to the 1 million US dollar bet for Bitcoin.
When I predicted Bitcoin at $500,000 by the end of 2020, it used a model that predicted $5,000 at the end of 2017. BTC has accelerated much faster than my model assumptions. I now predict Bircoin at $1 million by the end of 2020. I will still eat my dick if wrong. pic.twitter.com/WVx3E71nyD
— John McAfee (@officialmcafee) November 29, 2017
Of course there are also pessimists and skeptics about the future of Bitcoin. Star investor Warren Buffet sees BTC as a big bluff anyway and is just waiting for the Bitcoin bubble he has stated to burst. Golden enthusiast Peter Schiff warns on Twitter of a Bitcoin price near zero. He says that BTC cannot be used like gold or money, because the crypto currency is “too slow, too expensive and too vulnerable”.
A bubble is still a bubble, no matter how big it gets. It's not price that would prove me wrong. Bitcoin needs to succeed as money. So far its not even close.
— Peter Schiff (@PeterSchiff) May 11, 2020
Analyst Simon Peters of eToro sounds level-headed in interviews when he says: “After the Bitcoin halving we’ll see sales, the price will go down to about $7,500 and then the wait for the upturn will begin.
Hashrate at BTC stable after Bitcoin Halving
Quite a few experts refer to the hashrate in the BTC Blockchain as an important indicator of where the courses are heading. The hashrate quantifies how much computer capacity worldwide is working on the development of new blocks at Bitcoin. Now that the reward for this is halved by the Bitcoin Halving, the hashrate could collapse, some experts believe. Their argument: Bitcoin Mining is no longer worthwhile at current prices and electricity prices, and because it is becoming unprofitable, miners are switching off their ASICs. Until the market is cleared up, a negative price spiral would then dominate the BTC price, according to this theory. However, the current charts for the hashrate at Bitcoin, for example here and here, do not show dramatic drops, but the daily fluctuations and absolutely one hashrate further on historical highs. This means: Bitcoin Miners bunker their new BTCs and only sell at profitable prices. How long they can keep this up is another question.
Conclusion: Much ado about nothing in Bitcoin Halving?
The wild dreams of many BTC dealers about Bitcoin Halving have not yet come true. It is worth remembering that the earlier Bitcoin Halvings in 2012 and 2016 experienced stagnation and slump, respectively, before the price then picked up speed again and climbed to new all-time highs. It is also a fact that the Bitcoin Halving brought down inflation from previously around 3.7 percent to 1.8 percent. In a global economic situation in which the corona crisis is virtually forcing the central banks to print Fiat, this is an indication per BTC.
On the other hand, the “Black Thursday” of March 2020, with price losses of almost 40 percent in 24 hours, showed that Bitcoin’s daily price has long since been unable to decouple itself from classic stock exchanges. In the coming days, weeks and months we will find out whether and where the pendulum will swing after Bitcoin Halving. Just as certain is: The next Bitcoin Halving will come in 2024 at Block 840,000 and will halve the Miner Rewards to 3.125 BTC to fight inflation.
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