The highly anticipated Bitcoin halving event is less than a week away now. With markets still range-bound, the likelihood of a big price pump is diminishing.
Many were expecting a pre-halving pump but, similar to the previous years, it has not materialized.
Just 7 days left to #bitcoin halving.
— Mati Greenspan (tweets are not trading advice) (@MatiGreenspan) May 4, 2020
The halving will do a number of things to the Bitcoin network. First, it will reduce the block reward that miners get which has the effect of reducing issuance and inflation.
This helps create a predictable monetary supply while reducing debasement by inflation which is exactly what is happening to the US dollar.
If history rhymes, the months following the halving are likely to remain flat or even in decline in terms of the BTC price. The past two events have only resulted in large bull markets in the years following the halving, specifically in 2012 and 2016.
If pricing models like stock-to-flow are to be believed, then all will be good in 2021 when Bitcoin is set to make a new all-time high. However, there could be more pain to experience first before acquiring those gains.
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