- Bitcoin a whisker away from USD 10,000
- Bitcoin halving events are firing up discussions all over social media
- Ex UFC Champ Eddie Alvarez has been convinced to buy into Bitcoin
Bitcoin finally did it today, hitting USD 10,000 and popping that cherry for this year, although of course, that only happened momentarily on just on some exchanges. On CoinDesk Bitcoin price index, which we use daily, the day’s high is a whisker away at USD 9,999.
And of course, there is no bigger suggestion as to why this continued rally is happening, as next week’s Bitcoin reward halving looms, still expected to be on 12 May 2020, that will ensure newly generated bitcoins are halved from 12.5 to 6.25 every new block found.
— Mati Greenspan (tweets are not trading advice) (@MatiGreenspan) May 6, 2020
Social media is awash with all kinds of halving related news and discussions on the topic, as this event, that comes once every four years, prompts speculation over what a reduced new supply could to to Bitcoin markets. Social media data aggregator LunarCRUSH says that this has reached all time highs, while Quantum Economics founder Mati Greenspan noted: “After months of suppression, mentions of the bitcoin halving event on social media have now exploded.”
Crypto exchange OKCoin’s head of market development Matthew Ficke says that the Bitcoin rally could at least be in part due to new investors who are looking for alternative investments as the current economic downturn has them worried. He explained:
“This halving has received an incredible amount of publicity, far surpassing previous halvings particularly against the backdrop of the traditional financial markets.”
He could be right too, since when viewing things historically, it is easy for new entrants to observe how Bitcoin has only increased in price every year, and how it can usually achieve much higher prices than before. Ficke adds: “BTC/USD topped out around $10,400 in October 2019 and February 2020, so it is reasonable to view this as a short-term attraction.”
Others agree with this thinking, such as trading firm QCP Capital’s Darius Sit, who believes that this new investor interest is what is boosting the current rally, so once the event passes, this could not be sustained. He says: “Regarding halving, we hold the view that impact on price might not be material.”
Of course, the outlook in 2017, when the last parabolic run happened, was equally similar, as new investors sought to capitalize on Bitcoin with demand pushed by the familiar “fear of missing out” psychology or FOMO.
Can FOMO push Bitcoin back up above its all-time high of USD 20,000? Sit doesn’t think so for the short term, saying:
“Daily mined supply to 900 BTC, or just under USD 7 million at these levels, is a small fraction of the current daily trading volume. BTC price would be driven more by demand-side than supply-side dynamics.”
And, as we wrote recently, miners will have to be making that adjustment post halving when their revenues should drop by 50%.
Speaking of new investors, former UFC lightweight champion Eddie Alvarez has come out to say that he can no longer “sit on the sidelines” and has now gone in and bought himself 1 Bitcoin.
All right @Benaskren I finally jumped in and grabbed 1 Bitcoin , I can’t sit on the sidelines any longer . You got me !!! I still have no clue what it’s all about but I’m in … you might have to coach me they this .
— Eddie Alvarez (@Ealvarezfight) May 7, 2020
Apparently, the American mixed martial artist was convinced by fellow sportsperson Ben Askren — a known Bitcoiner — who admitted:
“You got me !!! I still have no clue what it’s all about but I’m in … you might have to coach me they this.”
Askren himself is an anticipator, changing his Twitter handle to reflect the halving event. Crypto Twitter, as is typical, has poured out their opinions. Some are welcoming the new Bitcoiner while others are deriding his move for being reckless.
One notable commentator is Mike Novogratz, who threw out the welcome mat for him, while Saifedean Ammous asked if Alvarez had received the mailed copy of his book, The Bitcoin Standard.
Admitting that he bought it recently, so paid about USD 9,800 for it, he declared that he was in this for the marathon:
“I don’t care about the value now or in the near future, it’s a long term hold, not a cash grab.”
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