Author | Ostrich Night Shift Editorial Department
Editor | Uncle Mine The 2020 keyword “halving” has evolved into another meaning. We learned that many so-called token funds bought Bitcoin at a high spot price when it was $10,000, and then held it for a long time with a leverage of less than 1.5 times, waiting for the halving bull market to come. Unexpected things happened, even if it was one times, on March 12, all the money was wiped out. Halving, halving, after all this fuss it turns out that the assets are halved! Last month, the COVID-19 pandemic affected the security of countries around the world, and then affected the capital market. The continued expansion caused market concerns. Before the end of the first quarter of 2020, the stock market and the currency market have witnessed new history. The global financial market has been shaken greatly, and the market is in a state of panic. The US stock market has set a new record, reaching four circuit breakers, which is so sour that people almost think that the end of the world is coming. Gold has become a tool that cannot maintain or increase its value. Even the hedging tool has been shaken. The resulting linkage effect has also caused the digital currency market to suffer the same fate. Cryptocurrencies have continued to fall, and Bitcoin has fallen from $8,000 to the $3,800 mark, setting the largest drop in nearly 6 years. Long investors shed tears of regret, "'Halving' turns out to be this subtraction." What is halved is not the unit output of Bitcoin, but the majority of assets, and even directly makes many people lose everything to zero. Can the halving in May still bring hope to investors? Is there still a way for miners to survive? Can the Bitcoin halving still bring a bull market? Can halving lead to an increase in BTC prices? The third Bitcoin halving is expected to take place on May 13, 2020, which is only one month away. Compared to a few months ago, investors' enthusiasm for halving seems to have declined significantly. Bitcoin did not follow the forecasts of many analysts and market experts, but made a big reversal. Currently, the price of Bitcoin is hovering in the range of US$7,100-7,400, and the price is gradually warming up. The huge fluctuations in the market have made investors face up to the volatility of cryptocurrencies and become more calm. Regarding the price after halving, industry insiders have different views, some are bearish and some are bullish. Former Bitcoin China CEO Li Qiyuan believes that the price of Bitcoin will soar in the future. Li Qiyuan expects Bitcoin to reach $10,000 after the block reward halving. He also predicts that by December 2020, the price of BTC will reach $25,000. His prediction is based on the theory of supply and demand. When the supply is halved and the demand remains the same or increases, the price increase is inevitable. By the third halving in May, an increase of 25% to 50% is a very modest expectation. However, after the Bitcoin Cash halving, the shortage of supply did not cause a significant increase in the price of BCH. The same is true for the previous Litecoin halving. All the good news is bad news. In addition to the halving factor, those who hold a bullish attitude also believe that the global economy is also an important factor affecting the price of Bitcoin. In order to boost the economy and mitigate the impact of the coronavirus, the G20 will launch an economic plan with a total value of 5 trillion US dollars. The US Federal Reserve also announced that it would lower interest rates to zero and launch a large-scale quantitative easing plan of 700 billion US dollars. According to statistics, the scale of monetary stimulus provided or planned to be provided by central banks around the world to the market exceeds 17 trillion, which has triggered speculation of large-scale inflation. Some believe that the massive money printing by central banks and the increasing currency depreciation will cause cautious investors to turn to Bitcoin as a safe haven to maintain their purchasing power. Kraken COO Dave Ripley and Paxful co-founder Ray Youssef are also optimistic, believing that according to the previous halving trend, the price will rise to a certain extent after this halving, and new investors will be able to enter the market. Some industry insiders pointed out that the current market situation does not mean anything. From a historical perspective, the bull market usually comes in the second year after the halving. In other words, the bull market will come in 2021. The ideal is full, and I hope the reality is not so skinny. However, every year, it is said that the next year will be a bull market, but the next year, the bull market still cannot be waited for. Even many people have written scripts for 2022, but you have to have the ability to work in this industry until 2022. Layoffs, business closures, mining industry faces challenges Bitcoin Cash completed its halving on the evening of April 8, but no blocks were produced for more than an hour after the halving. Some people were worried that since no blocks were produced for such a long time after the first halving, the situation for subsequent halvings would not be good. Miners would have to worry more about this half-year halving. At present, the road to survival for miners is becoming increasingly difficult. In March, Bitcoin miners brought in about $380.1 million in revenue. This figure is a 25% decrease compared to February. The cryptocurrency price drop affected the three SHA256 networks (BTC, BCH, and BSV), with many mining operations halted or acquired. Xing Meng from Securities Daily revealed in a recent research report that mining machines from old mining companies such as Bimain S9 (14TH/s) may not be able to survive with Bitcoin prices so low and the halving of rewards coming soon. F2pool reported that an estimated 2.3 million Antminer S9s have been shut down to date. Data shows that at $0.04 per kWh, an S9 with a hashrate of 14/THs will lose $11 per day. This data shows that for the S9 to continue to operate after the halving, the price of electricity must be close to free. Jay is an old investor in the cryptocurrency circle and an investor in many projects. He has been engaged in mining-related work since the second half of 2019. Before the New Year, he invested in a large mining farm in a western city and got relatively cheap electricity. He has been investing continuously recently. When asked about the halving market and whether there are still opportunities, he said that the consensus of the halving market has been verified by the market. This is a mechanism established by collective consensus, but there was no stronger consensus before the halving. The proportion of Bitcoin mining to the number of circulating Bitcoins is constantly decreasing, and the price in the secondary market may be more related to the manipulation of contract futures. However, he personally said that he continues to be optimistic about the mining industry, which is now gradually becoming a traditional industry. Due to the falling price of coins and the negative impact of the covid-19 outbreak, the mining farm Digital Farms announced that it would be closed indefinitely. Canadian cryptocurrency mining company Bitfarms also laid off employees and took a series of measures to reduce costs in order to meet the upcoming Bitcoin halving and maintain "long-term viability." According to relevant sources, many mining farms will receive subsidies from miners. Mining farms, miners, miners, and mining pools have formed a relatively complete business chain. If any link has problems, everyone will have a hard time. Bitcoin falling below the shutdown price does not mean that mining at this time will be a loss. Because the computing power is reduced, after some people shut down, the proportion of people with unchanged computing power is large, and they can mine relatively more minerals, which may not necessarily mean that they will not survive. The current global economic instability, as well as the fact that BCH, BSV, and BCH have already or will be halved, the crypto world is destined to be extraordinary in this halving. Mining profits are declining, the pressure on the mining industry is increasing, and miners are just trying to survive. Survival of the fittest, hope always arises in the midst of despair, and those who persist in this industry will gain something. But before seeing hope, the competitive pressure to be faced may double. In summary, halving is something worth looking forward to. Disclaimer: There are risks in the cryptocurrency world and investment should be cautious. This article is purely personal opinion and does not provide any investment advice.
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