Data shared by leading cryptoasset data aggregator shows there’s “substantially more interest in the bitcoin halving in 2020 than in 2016,” although not all indicators suggest BTC’s price will surge after the event.
The halving event will see block rewards on the Bitcoin network drop from 12.5 BTC per block to 6.25, effectively cutting the flagship cryptocurrency’s supply in half. The halving event is expected to occur on May 12, and Google searches for the term “bitcoin halving” are now skyrocketing, according to CryptoCompare.
Data shared with CryptoGlobe shows searches for the term over the last 5 years against the price of bitcoin. Looking at the chart, it’s clear recent searches eclipse the volumes seen in the last Bitcoin halving event, in July 2016.
Source: CryptoCompare
In the document CryptoCompare acknowledged that some believe the price of BTC will go up after the halving, as “simple economics would dictate that if there is a decreasing rate of supply of an asset and demand remains the same or increases, then all things being equal, the price of the asset will go up.”
Some analysts have indeed made bullish price predictions for BTC after the halving, with popular analyst PlanB using his Stock-to-Flow (S2F) model, which essentially establishes a correlation between the time it takes to reproduce the entire supply of an asset and its value, to predict bitcoin could see its price rise 10x.
Venture Capitalist and well-known bitcoin advocate Tim Draper has claimed the price of BTC will hit $250,000 by 2023, both thanks to the halving and to increasing adoption. Per Draper, the U.S. government’s massive stimulus package debasing the value of the dollar and sending people to the cryptocurrency space. As CryptoGlobe reported, the Federal Reserve’s balance sheet went over $6 trillion earlier this month.
CryptoCompare’s data shows that the market is very different compared to the last halving, as in 2016 the total daily bitcoin volume on spot exchanges rarely exceeded $1 billion, while this year daily volumes are regularly above $10 billion. As the market is much more developed now and there are more market participants, reduce selling pressure from miners may play a smaller role in the cryptocurrency’s price movements.
Source: CryptoCompare
Adding to the reduce selling pressure higher spot and derivatives volumes could mean bitcoin halving will have a smaller than expected impact on the cryptocurrency’s price. Some, it’s worth noting, point to the Efficient Market Hypothesis to argue that as everyone knows the halving is going to occur and supply will be cut in half, the event is already priced in. Popular bitcoin whale Joe007 has implied he believes the halving is priced in.
Featured image via Unsplash.
