With 14 days to go before the Bitcoin halving on the 12th May, we decided to look at a couple of the recent bullish and bearish price predictions, as well as news for mining in China
Bullish: Stock-to-Flow model predicts $288K by 2024
This will be due to the halved mining reward that miners will receive after 12th May, when considered alongside the existing circulating supply of BTC.
The model has proven itself to be an accurate indicator of prices in recent times and accounted for the recent unexpected crash of Bitcoin on the 12th March.
This is bullish news for Bitcoin over the next few years as we head into the 2020s after around 10 years of price maturity for the asset.
Bearish: Bitcoin whale says crash to come after halving
Previous halving events for Bitcoin have seen a big rally in Bitcoin as new buyers enter the market (evidence for this can be seen this year with the huge spike for the halving on Google Trends), which is then followed by a selloff before new highs are made. This halving is under different circumstances, with the impact of the coronavirus, it may be that we saw the shakeout earlier than usual.
Veteran whale JOE007 does not think this is the case. In a sarcastic tweet, he claimed buyers would rush in to buy Bitcoin on the day of the halving to buy in with “their unemployment checks” highlighting the lack of expendable income that many consumers are faced with.
Data reveals that JOE007 is currently in a short position for Bitcoin, suggesting he expects another shakeout before Bitcoin begins to climb in price. The previous halving in 2016 eventually saw the current ATH (All-Time High) in December 2017 — nearly a year and a half after the event.
Nooo, of course it's not priced in. On the very day of The Great Halvening, everybody will finally realize how underpriced BTC is, and they will all rush to buy it. In droves. With their unemployment checks. https://t.co/wAtitWuZbt
— Joe007 signals·alerts·funds are scams, all of them (@J0E007) April 26, 2020
Cheaper electricity for miners
When the halving occurs, the miner reward rate will reduce from 12.5 BTC per block down to 6.25 BTC, which will undoubtedly have an impact on miners’ revenue until BTC sees more growth and higher prices.
The Chinese city of Yaan has unveiled a new hydropower initiative that spells great news for local Bitcoin miners. Bitcoin has often faced criticism for its mining operations around the world, which consume a great deal of electricity and have raised concerns over the environmental impact and cost of using so much electricity.
With this hydropower, mining operations could benefit from cheap, clean electricity which could drastically increase their margins and profitability. Welcome news for miners looking to offset their reduction in income after the halving in two weeks’ time.