According to the investors of Bitcoin (BTC), which fell greatly with the flash collapse on March 12, the half-life event in May will serve as a catalyst for an important bull run. With less than two months left to this highly anticipated event, the panic and fear caused by the new coronavirus undermined the bullish prospects.
Unlike Fiat currencies, Bitcoin is a deflationary asset whose supply is limited to 21 million. With the third half-event that will take place in May, the amount of rewards miners receive per block will drop from 12.5 BTC to 6.25 BTC. This means that the inflation rate in the network drops by 50 percent.
Experienced analyst and stockbroker, Peter Brandt, questioned the effect of the halves on the price and claimed that the halves were grossly overstated. According to Brandt’s calculations, the daily supply of Bitcoin will decrease by one percent in contrast to the trade volume, which it defines as ‘real supply’, after the half-hurt of the effect.
Bitcoin halving = #Grossly_over_rated
The daily trading volume of BTC = the REAL supply of BTC
The daily reduction of mined $ btcs (NEW supply) equals approx 2 / 100th of 1% of REAL supply
Reduction of NEW supply b / c of halving as% of REAL supply = chump change
– Peter Brandt (@PeterLBrandt) March 17, 2020
The two previous bull runs of Bitcoin coincided with their half in 2012 and 2016. For this reason, many believe that history will recur again. On the other hand, the trade volume of Bitcoin, which shows the interest in the market, has been decreasing steadily since 2017. In 2016, this was not the case.