The Bitcoin (BTC) halving has finally occurred, on May 11, bringing to a climax one of the most hotly discussed topics in the space. With the next halving expected in 2024, there has been much talk of what happens between now and the near future. Analysts have considered Bitcoin’s price, the rate of adoption, institutional investment and regulation in the lead up to the halving and this is sure to continue for at least a little while longer.
Almost everyone has agreed that the world is experiencing tremendous economic strain, brought on by the COVID-19 pandemic and the resultant lockdowns. Governments have resorted to massive stimulus packages to hold together a fractured economy, as well as bring safety to the lives of its citizens.
The United States, the worst impacted by the coronavirus, in March declared a $2 trillion stimulus package - necessary, yes - but adding to the already sizable debt of the country. Other nations have also ordered stimulus packages, of varying sizes, but the end result for the global economy is the same: a very possible likelihood that the world will see tremendous levels of inflation in the near future.
Most analysts agree that the world is on the path for great economic difficulty and rising levels of inflation are not helped by the verifiable truths of income inequality. The poorest have been hardest hit by the pandemic and the rich are significantly less affected.
It is at a time like this, the likes of Mark Cuban, Tim Draper and Chamath Palihapitya have said (with varying levels of confidence), that Bitcoin could possibly become a legitimately safe asset. Bloomberg analysts also agreed that Bitcoin was experiencing a “leap in maturation.” Paul Tudor Jones revealed that 1% of his portfolio was invested in Bitcoin.
All agree that Bitcoin has value outside the current investment options, as a safe haven, hedge against inflation or even just for the sake of diversification. With talks of a recession, it’s more apparent than ever that an asset protected from the flaws of the current system is necessary.
Satoshi Nakamoto even put in a line of text, poetically hinting at the importance of decentralized currency, in Bitcoin’s genesis block. The Bitcoin halving is just one of many steps taken by Nakamoto to make Bitcoin a safe store of value, separate from the traditional system.
So Bitcoin is further becoming a deflationary currency, while governments are printing money at an alarming rate. There’s good news and bad news for governments and the world economy - and many in the industry seem to believe that the years to come could see an explosion of adoption.
Bitcoin Halving - What’s Next?
The halving, since it reduces the block rewards that miners get, has seen some discussion about the effect it would have on the network’s hashrate. But no such impact seems to have happened, as the hash rate has not seen a noticeable drop, peaking the day before the halving. F2Pool, the largest mining pool, was behind the mined block and has in fact seen an increase in hash rate.
As for the price itself, Bitcoin nearly touched the $10k on May 9 before dropping back down to $8k support levels. While some are disappointed that the halving didn’t spark a stronger rally, the sentiment is generally very high, with many having high hopes for the future.
Tyler Winklevoss, co-founder of the Gemini exchange, has said that Bitcoin is the safe haven for the future,
Meanwhile, fellow Gemini founder Cameron Winklevoss, as well as prominent cypherpunk Jameson Lopp, chose to point out the message placed in the block, which refers to the trillion dollar stimulus package,
Co-founder and CEO of Twitter Jack Dorsey, who also appreciates Bitcoin, opted for a simple wish,
With the hashrate seemingly maintaining itself, and much improvement to the infrastructure, the positive sentiment is understandably high. Many expect to reach the all-time high again by the end of the year, while others believe that, whatever the time frame, the outlook has never been better - and in this economic crisis, never more timely.