Bored Bitcoin Faithful Rekindle ‘Halving’ Hype

(Bloomberg) — Trading has gotten so tedious in the cryptocurrency world that advocates are resorting to touting a scheduled reduction in the amount of Bitcoins awarded to miners that is set to take place in about 18 months as a potential catalyst.

Most Read from Bloomberg

Bitcoin, the largest cryptocurrency, fell about 1% to $19,187 as of 2:58 p.m. in New York. It has been locked in a narrow range of around $20,000 since prices collapsed in June. Even so, analysts from ByteTree Research say “it is time to sit up and pay attention,” as the next halving is expected to happen in 2024.

Bitcoin undergoes what’s known as halving, or halvening, every three or four years or so. During a halving, coin rewards to miners — whose computers order transactions on the network and get paid with new Bitcoins — get cut in half. Prior halvings have coincided with bull runs, which often started a few months before a halving and continued for some months afterwards. The last halving, in May of 2020, was followed by a bull run that ended in a record Bitcoin price of almost $69,000 in November 2021. Since reaching that milestone, Bitcoin has tumbled about 70%.

“Our view remains that this epoch will echo previous ones, albeit with a lower amplitude given its scale,” ByteTree said in a Wednesday report, which pointed to expected greater regulatory clarity in the coming months as likely to light a fire under adoption of digital assets. “The technology is going to make it easier to use and expand its use case, regulation will provide greater investment clarity and the punishing macro headwinds will abate. This will bring greater activity into an ecosystem which is heading for another supply shock. If that’s correct, the next few months should be the perfect time to accumulate.”

The advice is coming at a time of low trading volumes and low volatility, when investors see nothing to get excited about. Many crypto long-timers aren’t excited about the halving, either.

“No, I don’t think the halvening will have much effect on prices,” said crypto investor Aaron Brown, who writes for Bloomberg Opinion. “I don’t try to predict the tides of enthusiasm among speculators. I don’t see major fundamental changes in the next few months.”

–With assistance from Vildana Hajric.

Most Read from Bloomberg Businessweek

©2022 Bloomberg L.P.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *