The year is almost over and that is why much is being looked back at 2019. We are not, we are already looking ahead to 2020. Next year the bitcoin block halving is on the schedule, and this can have major consequences for the price of bitcoin. With the bitcoin block halving, the fixed reward for miners is halved. This reward is at the same time the inflow of new bitcoin on the market. The halving influences the supply of new bitcoin and therefore also the price.
Are we looking forward to a major price increase next year? According to Alistair Milne, we can expect five things in 2020. Milne is Chief Information Officer at investment fund Altana Digital.
The coming months will be interesting
In a tweet, Milne tells what he expects from the bitcoin market in the coming four to five months. With that he refers to the run-up to the bitcoin block halving, which will take place in May of next year.
Things I expect to happen about the next 4-5 months due to the impending Bitcoin halving:
– BTC shorts close out
– People re-accumulate BTC if they had sold
– Miners start to hoard (e.g. borrow USD against assets)
– Under performing altcoins sold for BTC
– Bulls lever up– Alistair Milne (@alistairmilne) December 16, 2019
1. Investors close their short positions
If you go short, you bet on a bitcoin fall. If there are relatively many shorts, many traders expect the price to fall further. Milne expects this number of traders to decrease in the coming months.
2. People are going to accumulate bitcoin
Milne also thinks that investors will accumulate bitcoin again in the coming months. That is an unnecessarily difficult term for buying bitcoin. Or supplementing your stock of bitcoins. A lot of bitcoin has been sold over the past six months, but Milne expects more to be bought in the first months of 2020.
3. Miners are going to borrow dollars
The role of the miners is also interesting. What are they going to do? Milne thinks that miners will save in the coming months. In the tweet he does not discuss exactly what he means by that. Possibly, miners do not sell their bitcoin because they think the price will increase due to the halving. They do not dump their bitcoins directly on the market and may borrow dollars themselves to cover the energy costs of mining.
4. Altcoins are exchanged for bitcoins
Milne also foresees that poorly performing altcoins will be exchanged for bitcoin in the coming months. And that can be beneficial for the bitcoin rate. Almost $ 180 billion is currently circulating in the cryptomarket. $ 121 billion of that is bitcoin, the rest consists of altcoins. Milne expects more money to flow from altcoins to bitcoin.
5. “Bulls” are coming back
Finally, the CIO expects from Altana Digital that the bulls will return to the market. Bulls mean optimistic investors who believe in a price rise. These investors dare to go long on the bitcoin course in 2020.
At this moment the bears seem to prevail. These are investors who are more pessimistic and think that the price will continue to fall.
What do you think will happen in the run-up to the bitcoin block halving?
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