Five Scenarios of a Bitcoin Course after Halving
CoinShares evaluates five possible Bitcoin scenarios after the upcoming halving. From catastrophic and negative to positive and neutral.
Although the industry has already gone through two halvings and their results are well known, experts still disagree on the consequences of the coming week’s halving of the award to miners.
The third halving in the history of Bitcoin will indeed be very different from the two previous ones. The five most popular theories and scenarios are presented below.
Halving will cause a “death spiral” of miners. This unlikely scenario suggests that the price will begin to decline gradually, forcing miners to turn off equipment. This in turn will lead to stagnation of the bitcoin network: hash rate reduction, slow block generation, etc. The cycle will be repeated until it stops.
Following the Stock-to-flow model. The scenario is called believable, but many points remain controversial.
Traders who bought on rumors will start selling on the news – quite likely. CoinShares refer last year’s Litecoin halving when the price of a coin dropped significantly within four months after the event. In this scenario, the price of bitcoin will be at the mercy of speculators.
The additional pressure of miners on the price of bitcoin is quite likely. Especially in conjunction with speculators in the scenario above. The effect will increase with a decrease in quotes.
With minimal impact
Nothing unusual will happen, at least at first. The scenario is called probable, and its volatility will be within 1-5%.
CoinShares believes that collectively, the recent drop in bitcoin prices and the upcoming halving have prompted miners to reinvest and upgrade equipment. In the future, this will lead to a decrease in the impact on the value of bitcoin through the sale of coins.
Recall that the previously well-known trader Joe007 expressed doubts that the upcoming halving will lead to a sharp increase in the market value of the cryptocurrency, and called the current price “overvalued”.
If we talk about the long term, then Dan Morehead, CEO of Pantera Capital, a cryptocurrency hedge fund, believes that by August 2021, Bitcoin will grow to $ 115,000.
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