For many, the Bitcoin mining reward halving that is due to take place in less than two months, was purported to be a new game-changer for the cryptocurrency. In 2020, the year began with a solid price rise in January, which was followed up in February ahead of the halving.
However, there has been a twist in the tail as a sudden market collapse off the back of the Covid-19 outbreak has slammed every conceivable market, including the decentralized one of Bitcoin and the rest of the cryptocurrencies. Bitcoin fell as low as $3,800 and its timing showed a correlation to the general market falling.
Currently, Bitcoin managed to make a remarkable recovery — but that in itself corrected to leave the coin hovering just over $6,000. While this is still a positive place for the cryptocurrency to be in compared to its floor, the longer term outlook does not seem great.
In fact, the outlook towards the halving, and just after it, looks as if it will not play too much of a role as the markets in general rather focus on trying to get over the hit of this current outbreak and the ramifications of a financial crisis potentially bubbling under.
Expecting the best
The lead up to the Bitcoin mining reward halving was one that had differing opinions floating around. Many saw it as the way to renewed price action and a potential explosion in the Bitcoin price preceding it, and especially after it. However, there were some who thought it would be a non event.
However, it would be fair to say, especially after Bitcoin kicked off 2020 on such a strong note, that the majority of people expected the coin to have a strong year. This Could-19 outbreak and its devastation on the market is unprecedented, but also strange to be hitting Bitcoin so hard.
Not a real hedge?
Many hoped that the Bitcoin mining reward halving, being an occurrence related directly to the coin and its supply, would be a strong enough factor to keep the gains growing. But it appears that Bitcoin has become too reliant on institutional money after attracting these investors in.
It appears as much as Bitcoiners like the idea of being a decentralized coin separate from the markets, their desire to have heightened demand in a time of lowered supply has seen them become reliant on institutional investors who are not yet ready to make the move of calling the coin a hedge.