Bitcoin mining rewards are about to be halved, which has been considered a bitcoin bullish event. As the halving reduces Bitcoin's inflation rate, this will cause Bitcoin's transaction price to rise. This fact is supported by the halvings that have occurred.
However, it is important to note that although some analysts said that "the short-term impact of halving on the price of the benchmark cryptocurrency is mainly due to investors' general belief that it is bullish," halving may actually take months or even years to ferment. The price of cryptocurrencies.
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According to Cryptoslate, due to the continued decline in the price of Bitcoin, the entire cryptocurrency market's enthusiasm for the upcoming halving of Bitcoin has also begun to decrease. This may mean that the halving will not cause the price of Bitcoin to rise in the short term.
Bitcoin price drops, interest halves plummeted
Data provided by Google Trends shows the correlation between the price of bitcoin and people's interest in the upcoming cryptocurrency halving event (currently scheduled for May 11).
The table below shows the number of searches for the keywords "halving" and "bitcoin halving" in the United States last year. Data show that since the end of February Bitcoin started to decline from a high of $ 10,500, the search volume of these two words has also started to decline significantly.
This seems to indicate that investor interest in halving is purely based on the fact that it may affect the price of cryptocurrencies in the short term. And the continued large-scale selling may make the traditional theory that "halving the price will lead to a rebound" no longer hold.
Jesse Proudman from Strix Leviathan (cryptocurrency hedge fund) said that Bitcoin's mining revenue will be greatly reduced by halving (the inflation rate is reduced by about 50%), which will prevent many mining companies from obtaining sufficient equity capital And announced his withdrawal.
As smaller mining companies have withdrawn from the market, this will cause turbulence in the bitcoin trading market in the short term. At the same time, there are only a handful of mining companies on the market with sufficient funds to withstand this halving event, and Bitcoin's mining power will eventually be concentrated in the hands of these few people.
Compilation: Lin Shihao
Image credit: Pixabay
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