Bitcoin halving was held yesterday evening cutting miners reward into half dropping from 12.5 bitcoin to 6.25. What would be the aftermath price of Bitcoin, there was so many speculations. A speculation said the halving could give rise to the value of bitcoin and attract new players into the market.
In the current coronavirus-hit world, investors can use bitcoin as an inflation hedge and to save their assets against currency devaluation. U.S. economy has been pumped by trillions of dollars by Federal Reserve and Congress to fight against the pandemic and lockdown is slowing the process. These initiatives of central banks around the world have raised fears of inflation.
Investors headed towards the perceived safety of dollar from the beginning of the pandemic. In this situation, the rest of the world has two ways left one is to see their currency eroding in front of the dollar and another is to keep printing money.
Bitcoin could seem to be the perfect hedge for any institutional investor portfolio because they seek protection for their portfolios against the world’s central banks behavior. The price of Bitcoin can accelerate to $20,000 per Bitcoin if it becomes a safe-haven asset and a hedge against inflation. But any untoward situation in near future can leave bitcoin price collapse.
At the price level, miners using rigs from 2016-18 will not be lucrative. The situation can be appeared like more bitcoin will be sold by miners to help finance new machines. Maybe we may not see the level of mining activity recover until next year. Prior to the halving miners tried to squeeze as many as bitcoin from the network as possible leaving the Bitcoin’s hash rate climbed to an all-time high. Weak miners can be deported from the market on the off chance the price of Bitcoin goes down. The market is descending down because of constant liquidation which is being caused because they are selling bitcoin in the treasury making it hard for other miners to run their operation profitably.