Trigger to Bitcoin bull or not?
By Hedy Bi
Some signals of bull action
These days, Bitcoin price approached $10500 in a new bull-run that followed a recent dip to the support at $11000.
Bitcoin will be halved at the beginning of May this year. Besides, BCH, BSV, and other cryptocurrencies will also usher in a time of their halving this year. The previous two Bitcoin halvings happened on the 28th of November, 2012 and the 9th of July, 2016. The prices of Bitcoin at the two halvings were $12.31 and $650.63. As BTC volume and price rebounded at the same time, driving the overall market presentation.
Also, the international situation has been fluctuating. Bitcoin bullish action is on factors like the coronavirus breakout, FED’s chair comment and some other international affairs. As a “digital gold”, BTC will attract some safe haven funds from institutional investors.
Learn from the history
Continue the topic of halving, we could zoom in the price of Bitcoin:
Besides the almost 55 times increase during two halvings, we could use yearly return to look back: If you invest $1 at the start of 2010 then you would get around $90,000 today. $1 in American stocks today would be valued at just $3.46. 30-year US treasury bond would now be worth $2.08. And Gold is only $1.34 on the same conditions. Bitcoin was also the strongest asset to invest during the last decade.
Past performance is not indicative of future results. As we all know the timing, you could do your own investment research.
The future and some suggestions from institutions
Optimism for secondary market:
BTC:
In 2020, the market will start to be halved, and the callback is a rare opportunity to increase positions. Investors can do a good job in asset allocation in combination with their own situation. According to the gathering information, most institutions believe that this halving signal has become a recognized opportunity in the crypto industry as a good investment opportunity.
What’s more, from the perspective of wealth management, compared with other traditional financial asset, Bitcoin is closely linked to Wall Street’s fear index, according to Deutsche Bank. A low volatility environment will encourage investors to enter higher risk assets, such as crypto currencies, to achieve higher return on investment.
Altcoin:
According to Yahoo Finance that ‘SEC Commissioner Rekindles ICO Hopes, Proposes Safe Harbor for Token Projects’. Bitcoin reached its highest level this year on Wednesday after it breached above its psychological resistance of $10,000. But its rally is slowing down which may trigger an altcoin season.
According to heromalaya90, ‘Most likely it will be rotational play whereby one coin goes parabolic after another or maybe it will move in groups versus everything goes up together. We have seen for example Dash, ETC and Zcash going up together. And also the Bitcoin family, i.e BSV, BCH, BTG, BCD went parabolic. It will always move in that way.’
Source: Tradingview
Difficulties for miners:
As industrial downstream, mining industry is very important for us. Different from the optimism of the crypto currency secondary market, the miners are facing great risks. This is even a gambling: the increase of bitcoin price is large enough to offset the loss caused by the increase of the whole network computing power and the reduction of production, so that the miners can make profits. Perhaps the only good news for the mines is that, based on historical experience, bitcoin prices will double when the market halves.
