Bitcoin’s upcoming mining rewards halving – which is slated to occur in May of 2020 – has long been looked upon as a catalyst for next major BTC bull run, primarily due to the historical precedent of these events.
In spite of this, one research group is now noting that the direct fundamental impact on Bitcoin’s inflation that is caused by the halving will not be enough to catalyze any sort of notable upwards momentum, although they also note that there is another reason why the event could spark an uptrend.
Here’s Why Bitcoin’s Halving Could Still Prove to be Highly Bullish
In years past, mining rewards halving events have always been closely correlated with the starts of parabolic price cycles that lead Bitcoin to fresh all-time highs.
It is important to note that there have only been a handful of these events in Bitcoin’s relatively short history, with the small sample size making it incredibly difficult to predict with any certainty that future halvings will have the same effects as the ones seen in years past.
This year, Bitcoin’s inflation rate will drop from 3.7% annually to 1.8%, which may not be a big enough reduction to catalyze any sort of upwards momentum.
Messari, a blockchain and cryptocurrency research group, spoke about this in a recent tweet, noting that while the inflation reduction in it of itself may not be enough to propel BTC higher, the reminder it offers the markets about the asset’s scarcity may help fuel a price rally.
“On 2020 $BTC halving: + Inflation will drop from 3.7% to 1.8%. 2% inflation reduction is not a big enough catalyst + However, market will be reminded of BTC scarcity. @GrayscaleInvest & @CashApp will be buying majority of new issuance by Q3 2020,” they noted.
On 2020 $BTC halving:
+ Inflation will drop from 3.7% to 1.8%. 2% inflation reduction is not a big enough catalyst
— Messari (@MessariCrypto) December 20, 2019
How Bitcoin’s price trends in the months preceding this coming May will likely provide insight into what investors expect the results of the halving to be.
Featured image from Shutterstock.
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