The Effect of Halfway Half Bitcoin Price in the Coronavirus Shadow: What Do Experts Say?

Traditionally, the mining block reward split is thought to be the catalyst for the price of the halving cryptocurrency, which cut the Bitcoin supply by half. Indeed, the price rises before or after the halfway event that takes place every four years.

However, the coronavirus monster, which appeared while there was little time left for the halfway in May, has deeply affected the global markets as well as the cryptocurrency market. The price of the largest cryptocurrency fell more than 50 percent last week and fell from $ 8,900 to $ 3,600.

What effects will the half-split in May have on the Bitcoin price in such a terrible picture? What do the experts and analysts think about it? We have gathered all these opinions for you.

This Time Conditions Are Different…

It was observed that the prices were moving upwards hard during the halves of 2012 and 2016, and there were also great fluctuations in the hashrate of the cryptocurrency. The first half was mostly important for Bitcoin to prove itself and show that it was a really scarce asset, and the effects of the first half increased in the following months. Similar things happened in the second half. But the third half will take place under conditions that are quite different from the previous half and will be a different experience in all aspects.

“There will be a devastating price drop in the third half of Bitcoin,” said Matthew Graham, CEO of investment company Sino Global Capital. As both an unrelated asset and a safe haven, I am not talking about the great damage to Bitcoin theses. ” found the assessment.

Miners Face Great Damages

The biggest impact of the third half will undoubtedly be to the miners. Following the half-split, the amount of rewards for miners to receive 12.5 BTC per block will drop by 50 percent, so miners’ income will drop by 50 percent. On the other hand, the recent collapse in Bitcoin price means that things will be four times worse for miners after the split.

Cryptocurrency exchange DeversiFi CFO Ross Middleton said, “Bitcoin price has reached a level where only the most efficient miners are still profitable. If the bitcoin price does not rise after the split, there is a risk of capitulation for inefficient miners and another significant price drop as miners start selling their devices. ” said.

With all this, miners were caught unprepared for the price accident. All experts declared that the price of Bitcoin would rise strongly after the split. Therefore, miners went to accumulate instead of selling their BTCs. In the current situation, besides losing 50 percent of the value of BTCs, miners’ reward per block will decrease by 50 percent in 50 days. So a second shock wave for miners is on the way.

Unsurprisingly, many miners who have fallen victim to the final decline have stopped mining because their process is no longer profitable. Because, according to the estimates, for an average miner to be profitable, the price of Bitcoin should be around $ 7,400-7,500.

Mati Greenspan, founder of the crypto analytics site Quantum Economics, said miner’s capitulation will lower the hashrate, but this drop will allow new miners to enter the market.

According to Per Balani, there is no reason to panic. According to him, the decrease in price will cause many miners to be capitulated, but there is still some supply in the system, which makes the process sustainable.

While the peer-to-peer crypto exchange Paxful COO, Artur Schaback stated that the situation was good in general, “We still see that the hashrate has not fallen and miners have not shut down their machines,” he also predicted that the end of the work was positive: we expect growth. ”

Changing Bitcoin Narrative

One thing is certain, which is that the Bitcoin narrative has changed until the third half. New narratives developed shortly after the birth of the biggest cryptocurrency. Digital gold is a protection (safe haven) against the value store and the financial system.

Anthony Pompliano, co-founder of Bitcoin influencer and investment management company Morgan Creek, used the phrase “Bitcoin is on its way to become the next global reserve currency” in November last year. However, the price collapse on March 12 caused these narratives to be questioned.

The biggest contribution to the changing narrative was made by Peter Schiff, the gold supporter, Bitcoin critic, Euro Pacific Capital CEO. In a tweet he posted after the collapse on March 12, Schiff said to his followers, “Gold dropped 2.5 percent today, but Bitcoin dropped 25 percent or 10 times more. Is this really digital gold? ” asked the question.

Peter Schiff is not the only name to question the status of Bitcoin. Bitcoin.com founder Roger Ver said, “Obviously this is not the end of Bitcoin, but it must be the end of nonsense ideas put forward by BTC maximalists. “Bitcoin is a value store and Bitcoin is useful as a value store.”