Summary

The article discusses the potential impact of Bitcoin's third halving on its value, considering historical trends, current market conditions, and the influence of external factors like the COVID-19 pandemic.

Abstract

The third Bitcoin halving, scheduled for May 11th, 2020, is a significant event where the block reward for miners is halved, potentially driving up the price due to reduced supply. Historical data from the 2012 and 2016 halvings suggest that Bitcoin's price tends to reach a new all-time high approximately 12-15 months post-halving, though a slight drop often occurs immediately afterward. The current global economic situation, exacerbated by the COVID-19 crisis, has increased Bitcoin's popularity and attracted institutional investors, who view it as a potential hedge against inflation. Despite the increased interest and the halving event, the article advises that it is not too late to invest in Bitcoin, suggesting that investors should be prepared for short-term volatility and focus on long-term gains, with a strong emphasis on personal investment strategies and mental resilience.

Opinions

The author believes that history shows a pattern where Bitcoin's price increases significantly after halving events, but not immediately.
There is an opinion that Bitcoin's popularity and maturity as a cryptocurrency have grown significantly since the last halving, with more mainstream recognition and a larger user base.
The article suggests that the current economic climate, influenced by the COVID-19 pandemic, could positively affect Bitcoin's value as investors look for alternatives to traditional financial instruments.
Notable investors like Paul Tudor Jones and Raoul Pal are cited as figures who view Bitcoin as a profitable investment and a digital equivalent to gold.
The author advises that while it is not too late to buy Bitcoin, investors should be strategic, considering the potential for a post-halving price drop and their own investment timelines.
A key opinion is that belief in Bitcoin and blockchain technology's future

Cryptocurrency

Is it too late to buy Bitcoin right now?

Now that the third halving is happening

The third Bitcoin halving is scheduled to happen on May 11th, 2020.

In cryptocurrency, halving is an event where the block reward for miners is cut in half. This event theoretically would drive the Bitcoin price up. Since bitcoin becomes more expensive to mine, miners would likely hold back putting their coins into circulation unless they meet the price they want. Thus limiting its supply and make the cryptocurrency more expensive to get.

If you’ve been following the price of bitcoin for the past week, you might have noticed that bitcoin was successfully hit the rate of $10,000 per coin. However, it was soon followed by a significant drop during the weekend, where the price was slashed into more than 10% in a matter of minutes.

Will the Cryptocurrency Industry be Dead or Alive? | Data Driven Investor

In early September, we had a debate within X-Order about the future of the token market. Interestingly, our views are…

www.datadriveninvestor.com

The price volatility might make anyone, especially those who are new to Bitcoin and cryptocurrency overall, to feel reluctant to make an investment.

If you’re wondering if these days are a good time to buy or stock up more bitcoins, there are several things to put into considerations.

Examining what happened in the past halvings

Bitcoin has experienced two halving events in the past, the first one was the halving in 2012, followed by the second halving in 2016. If there’s one big similarity between the two halving events, it is that Bitcoin always reaches a new all-time high after 12–15 months following the halving event.

The second halving in July 2016 followed by the famous bull run at the end of 2017

But when looking into the details on the Bitcoin price chart around the halving time, you will see that there was a slight price drop just after the halving date. Afterward, the price continued to go up again.

There was a significant price fall following the halving from June to September 2016. The second Bitcoin halving was scheduled on June 9th.

To answer the question of whether the Bitcoin price will increase after the third halving, history shows that it can happen. But you won’t see a sudden increase immediately. In fact, it’s very possible that the price will drop first shortly after the halving time.

The current condition of Bitcoin as a cryptocurrency

History might have given us important insight into what to expect for the upcoming halving event. However, another thing that more crucial is to take a look at the situation right now. The current situation today greatly differs from how it was in 2012 and 2016. Not just within the cryptocurrency world, but the world in a more general sense.

What happened in the world today could steer the Bitcoin price differently this time than it was in the past.

The first thing to consider is Bitcoin's popularity. The largest crypto in the world now is not as unheard as it was in 2012. That year, it was mostly people familiar with the blockchain technology who were aware of the halving or even the crypto itself. In 2016, Bitcoin was getting more popular. However, it’s still not as popular as today where Bitcoin halving keywords reached an all-time high on Google Search results.

There are a lot more players on the market now, which means you will see a lot more interesting price actions. Exchanges like Binance are welcoming a surge of new users along with an increased volume of transactions. As a result, miners will have less impact on Bitcoin price this time.

Bitcoin as a cryptocurrency also has matured over the years. Exchanges now are less prone to hacks and are watched by regulatory bodies. Bitcoin futures trading has been an option since 2017. Over the decade, Bitcoin also has proven not to be just a bubble. It has also been giving the best ROI compared to more traditional forms of investment.

How COVID-19 may impact Bitcoin’s third halving

This year, the third Bitcoin halving coincidentally takes place while the world is battling a health and economic crisis on a global scale.

The coronavirus pandemic has halted much of the economy around the world. With the recent stock market crash, oil price drops, and the uncertainty on how the economy might recover, traditional investors have started considering unconventional options like Bitcoin.

Many also started to think that Bitcoin could act as a hedge against inflation, especially now that governments keep printing money for economic stimuli. Recently, Bitcoin has started to attract institutional investors. One of the recent public figures who see Bitcoin as the possible digital version of gold is billionaire and investor Paul Tudor Jones.

What’s intriguing is that he implied Bitcoin is the type of investment that most likely will going to be profitable.

In his word,

The best profit-maximizing strategy is to own the fastest horse — Paul Tudor Jones

Another notable figure that’s been keeping an eye on Bitcoin is Raoul Pal, the former Goldman Sachs hedge fund manager.

Takeaway

When deciding whether it’s too late to buy Bitcoin right now, the answer is no. But you need to pay attention to the short-term price action, especially shortly after the halving event. You might spot perfect buying opportunities during the post-halving selloff.

You also need to take your own plan into consideration. Such as when are you planning to take profit or the time frame you expect to finally enjoy the return of investment. The past halvings charts suggest to at least wait until 15 months after the halving. Another thing to prepare is a strong mentality riding through the volatility of the market.

But in the end, if you believe in Bitcoin and the future of blockchain, any time will be the right time to buy.