Although Bitcoin’s recent price action seems to suggest that a Christmas rally for Bitcoin is unlikely, the strength being shown by Tezos in the current market has got XTZ HODLers very excited.
Bitcoin’s Recent Price Action
According to data from CryptoCompare, since 26 June 2019 when Bitcoin reached $12,913, it’s highest price so far this year, it has dropped over 44% to $7,219 (where it was around 10:05 UTC on December 13), as can be seen in the following six-month BTC-USD price chart:
Although Bitcoin is still up 85.68% for the year-to-date period, Bitcoin’s disappointing performance during the past six months (and in particular, during the past week) has many Bitcoiners thinking that a Santa Claus rally seems unlikely this year, and instead they are focusing their attention on a major event due to take place next year.
The Next Bitcoin Halving
As you probably know already, once every 210,000 blocks (approximately every four years), there is a Bitcoin halving event (where the block mining reward is halved, such that miners receive 50% less BTC for verifying transactions); these Bitcoin halving events keep on occurring until the maximum supply of 21 million bitcoins has been minted.
Well, the next Bitcoin halving event is estimated to occur around 14 May 2020; this is when the block mining reward will decrease from 12.5 BTC to 6.25 BTC.
However, what is not clear is how the next Bitcoin halving will affect the Bitcoin price.
The pessimists point to the Efficient Market Hypothesis (EMH)—”a hypothesis in financial economics that states that asset prices reflect all available information”—and argue that the next Bitcoin halving is already priced in.
The optimists say that the fact that there is debate in the crypto community about how the next halving will affect Bitcoin’s price suggests that the next halving has not been fully priced. They also use the fact that very few retail investors really understand what Bitcoin halving means as a further bit of evidence to bolster their case. Finally, they say that Bitcoin’s strong price rallies around the time of Bitcoin’s first two halvings in 2012 and 2016 suggests that will see a strong price rally either in the run-up to the next halving or shortly following it.
Tezos (XTZ) Showing Strength in a Weak Crypto Market
During the past six months, while Bitcoin has dropped around 44% in value, Tezos has increased in value by 33.12%, as you can see from the six-month XTZ-USD price chart shown below:
Furthermore, in the year-to-date period, Tezos has performed much better than Bitcoin, with a 269.93% increase in value (i.e. from $1.298 on June 16 to $1.728 on December 13).
And when you take a closer look at Tezos’s recent price action over the past week, you find out that it has outperformed Bitcoin by just over 30%. As a result, Tezos has “flipped” over several of its altcoin competitors, and is currently the 10th most valuable cryptoasset with a reported market cap of $1.4 billion.
If the strong price rally that Tezos has been experiencing—partly, as a result of staking support by major crypto exchanges such as Coinbase, Binance, and Kraken—continues during the next couple of weeks, there is a good chance that Tezos will be able to overtake Bitcoin SV (BSV), which has a market cap of $1.67 billion, and move into 9th place.
Featured Image Credit: Photo via Pixabay.com
