Bitcoin was on a hot streak, market sentiment was bullish as it had never happened before a Halving before. But, everything went flat as soon as the event took place. Why hasn’t Bitcoin’s value grown as expected?
For weeks we were reporting all the signals that their Bitcoin investment models were showing to the experts. In addition, on several indexes that showed optimism regarding the Bitcoin Halving event. All this indicated that the value of BTC was going to increase. But, so far, it has remained strangely stable.
Sure, experts and indices have always warned that despite the fact that their models seemed irrefutable on paper, in reality the price of Bitcoin always does what it wants. So it is unpredictable.
Why has the price not grown as expected?
The answer to this question, can be answered with another one: should the value of Bitcoin really increase?
Many experts still believe so. They argue two main reasons, one related to supply and demand, since by mining half of Bitcoin, the demand for BTC is expected to increase.
The second reason is because at these prices many crypto miners do not have a profitable business. Which will cause another impact on the offer in a negative way.
With fewer miners in the ecosystem, supply will further decrease and, in theory, demand will continue to grow.
Although many experts show us this or that model, about the Japanese candles, crosses and others, in short, these will be the two reasons that, it is hoped, will take the value of Bitcoin through the skies. So let’s breakdown one by one.
The value of Bitcoin will increase because there will be fewer miners
There is something important that we must point out. Most of the good analysts expressed that Bitcoin’s increase in value was not going to be instantaneous. Therefore, we must put our heads on ice, calm down and wait for the “fat cows” season.
The price increase, due to the first blow of the offer, will not be generated instantaneously. Many of the world’s largest mining farms have month-long contracts for electricity, leases, personnel, etc. Plus, they have the financial muscle to last for several months.
In turn, many of them took the opportunity to mine as much as possible before Halving. This is why we saw the increase to the historical level of the Hash Rate before the third Halving of Bitcoin.
Therefore, the reduction in supply through this route will not be visible for a few weeks.
The value of Bitcoin will increase by Halving
The situation that has the most impact on the Bitcoin ecosystem is undoubtedly Halving. This is basically the halving of the reward miners get for mining each block of BTC. Also, this is the only way to create Bitcoin.
And although the offer has been cut in half the previous days, there is another factor that we must not forget, and this is the demand. Based on what most crypto experts expect, demand for cryptocurrencies will increase in the near future.
Either because of the imminent economic crisis that the Coronavirus crisis has brought. Or due to the lack of confidence of many towards the traditional system. Or because the panic over rising global inflation, thanks to the printing of inorganic money by many world banks around the world, is becoming more real.
Why hasn’t Bitcoin’s value grown as expected? Then we could respond, because the time has not yet come.