Coronavirus Trillions Get Bitcoiners Wondering if Halving Still Matters
Before the coronavirus hit, bitcoiners were looking forward to next month’s “halving” – a once-every-four-years reduction in new supplies of the cryptocurrency – as the primary factor that would drive prices higher, potentially even a 13-fold increase from current levels.
Since the coronavirus pandemic hit, however, the market’s focus has shifted instead to the trillions of dollars of emergency aid and money injections pledged by the world’s governments and central banks. Those are seen as enhancing bitcoin’s appeal as a hedge against inflation, similar to the traditional arguments for buying gold.
You’re reading First Mover, CoinDesk’s daily markets newsletter. Assembled by the CoinDesk Markets Team, First Mover starts your day with the most up-to-date sentiment around crypto markets, which of course never close, putting in context every wild swing in bitcoin and more. We follow the money so you don’t have to.
However, with bitcoin prices stagnating over the past week in a range between $6,600 and $7,200, well below the level predicted in many investors’ halving-predicated models, some industry analysts have been wondering when, or even if, prices will take off. An even knottier quandary for bitcoin bulls looms if prices begin to tumble anew.
“I don’t want to say that this is going to be bitcoin’s last stand, but it really is going to put the dominant investment narratives to the test,” said Joshua Frank, CEO of TheTIE, a provider of data on digital assets.