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- Should investors buy BTC now that the bitcoin halving has concluded?
- We look at various arguments from top crypto analysts to gauge what actions you should take now.
- The just-concluded BTC halving has come at a time when institutional markets and individuals are investing in bitcoin more than ever before
On May 12, 2020, bitcoin underwent the much-awaited 3rd halving event, which led to the number of new coins awarded to the computer wizards who “mine” the cryptocurrency being cut in half. However, forecasting which way BTC prices will move from here on is complicated.
The just-concluded halving event has, in recent months, kindled strong market interest from institutional buyers, where BTC broke through $10,000 on May 8, 2020. But how has the halving affected the BTC price, and should bitcoin investors buy the top crypto now?
The Case for Buying Now
In 2016, BTC traded sideways for over two weeks following its second halving and fell to $465 on Aug. 2, a loss of nearly 30% from the halving day price of $660. The fresh record high above $1,160 was set almost eight months after the supply cut.
However, the just-concluded 3rd halving is different from the previous event because it happened against the backdrop coronavirus crisis. As a result, people have a solid reason to search for alternatives like bitcoin, which can act as a store of value during global economic turmoil.
As a result, notable price dips, if any, could be short-lived, and the odds of bitcoin setting new highs next year look strong. As for now, the price seems to have remained stable after the halving and is hovering around $8,807 at the time of writing.
On-chain data suggests both small and large investors were accumulating coins in the run-up to the event. Some investors may opt to offload and sell their BTC coins now that the halving event has elapsed, putting heavy downside pressure on BTC prices.
One result of the halving is it will double the cost of mining. Hence, if there is a post-halving price pullback, older-generation mining machines like the Antminer S9s would yield losses, forcing miners to scale back operations or leave the industry.
Hard-hit bitcoin miners may now offload their holdings to cover costs, adding to downside pressures around prices.
These factors have led to some crypto analysts projecting that the cryptocurrency will test five figures and carry on with its uptrend for the rest of the year. For instance, Jehan Chu, co-founder at Hong Kong-based blockchain firm Kenetic Capital, was quoted saying:
Though the initial surge to $10K stalled at $9,400, look for a further thrust to break the $10K level followed by a retreat post-halving, with constant forward progress through 2020.”
Another case for buying BTC is historical data from the two previous block reward halvings, which came before a series of cryptocurrency bull markets that led bitcoin to consecutive all-time highs.
And this time around will be no different, according to leading eToro analyst Simon Peters, who explained that, as with previous halvings, we could expect prices to go on an extended bull run following today’s rewards reduction event.
The Case for Buying Post Halving
In the long run, we expect that the just concluded halving and the industry’s gradual maturity will positively affect BTC prices. This makes BTC a top choice for investing in post-halving, as the coin is expected to continue to gain traction globally.
Therefore, investors looking to profit from bitcoin in the coming months could hold off until any volatility associated with the just concluded halving dies down before purchasing BTC when prices stabilize.
Scott Freeman, the co-founder of crypto-focused institutional trading firm JST Capital, advises that BTC will continue to be a viable asset, and investing in it post-halving will likely lead to long-term rewards.
We expect continued volatility but expect to see good long term risk-reward in bitcoin and also expect it to behave in an uncorrelated manner to traditional financial assets.
Meanwhile, bitcoin enthusiasts were excited by recent news that famous crypto investor and BTC evangelist Paul Tudor Jones are buying bitcoins to hedge against the inflation caused by the unprecedented coronavirus pandemic.
This suggests that many folks will continue to hedge their fiat portfolios against rising inflation in traditional markets by looking at BTC as a long-term store of value post-halving.
The much-anticipated bitcoin halving is now behind us, and prices seem stable at $8,807. The direction of prices will be determined mainly by how bitcoin miners and institutional investors act in the short term.
No matter how prices go from here, it is clear that BTC will only grow in prominence in the coming months. Indeed, the broader bitcoin and cryptocurrency industry has been cheering the just concluded bitcoin halving, hoping it will bring new users and potential sales with it.
A good indicator of BTC as an asset of choice for many in the coming months is that investments are pouring into the institutional market. In addition, more individuals are investing in bitcoin than ever before.