Traditionally Bitcoin has seen price increases each time its 4 yearly halving comes around. However, this time around there could be a longer wait before the valuation of BTC improves.
For some, the long wait is not what they had been promised or led to believe, while there is an army of long-term investors that see the delay between the halving and price hikes as a positive. Now this may be contradictory to what you may have heard or if you are like us, then you already know that BTC is a tough cookie to crack when it comes to price predictions simply due to its volatility.
If you are part of latter group, the long-term investors, then you have no doubt been investing in Bitcoin and other cryptos for a long time. Those of you that are new to cryptos and invested believing the halving was an easy way to make a quick effortless buck, then read on because the truth behind the current rises in value and what to expect for the future is about to be revealed.
Now baring all this in mind, the halving itself, or at least the technicalities behind it will not affect BTC’s valuation as many have been touting on various online grapevines. That said, the halving does cause indirect valuation shits due to external influences that have and will continue to its value.
There are some simple explanations for this so keep reading!
The first explanation is in regards to recent price hikes prior to the halving are easily explained. The recent increases in value are because BTC has been in demand in the run up to the halving. This demand is most certainly due to all the hype that has been surrounding the 12 May 2020 halving which was Bitcoins 3rd halving over its 12-year existence.
Many newbies to the BTC market have been led to believe that BTC is about to suddenly see an exponential rise in value as a direct result of the halving. A rumour that seems to have been echoed on sites like Medium and Reddit where non-experts with huge readerships share their opinion or ‘what they have heard on the grapevine’.
As you can imagine, their words are taken for gospel and spread like wildfire on social media and other platforms. This has led to the huge demand for BTC as of late. Now, what happens next? BTC doesn’t perform overly well, stabilises or even drops. Who really knows? Cryptos are just so unpredictable/volatile?
Now when these newbie investors lose interest, which there are currently hundreds of thousands of them, the price of BTC will inevitably drop. Lack of demand coupled with an accumulative sell off by the aforementioned new to the market investors will invariably result in a drop in value. Bad news right?
Well not so much. What will happen next is the sell offs will stop, and the price of BTC will jump up as it always does. Partly because less blocks will be mined, so less BTC will be in circulation as miners exit the market due to the fact that their rate just halved from 12.5 BTC per block to 6.25 per block. This will cause more demand as the ‘new gold’ continues to become more valuable.
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