On May 4, CoinShares Research released its ranking of the likelihood of various halving scenarios, as well as their potential impact on the industry.
Bitcoin’s halving (BTC) has captured the imagination of the crypto industry and there is no shortage of wild predictions that predict everything from the death spiral that will destroy the Bitcoin network to the one that predicts its parabolic rise. Earlier today, this topic was also discussed in another episode of Cointelegraph Talks.
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In his latest publication, CoinShare’s head of research, Christopher Bendiksen, analyzed five of the most popular scenarios and concluded by proposing his own.
Negative scenarios. First, Bendiksen dismisses the spiral-of-death scenario that says halving the mining reward will discourage the Bitcoin miners. Bendiksen believes that the empirical evidence Bitcoin Compass, Bitcoin Lifestyle, Bitcoin Gemini, Crypto Cash, Bitcoin Trader from the two previous halvings makes this scenario highly unlikely. Andreas Antonopoulos also recently said that this scenario is unlikely.
Another pessimistic scenario is based on the assumption that professional investors are „buying the rumor“ and „selling the news. Bendiksen says that this scenario is difficult to evaluate as traders do not usually share their strategies. In any case, he does not expect to have a major impact on the price.
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The next negative scenario that the researcher examines equates halving with falling prices. When the price of Bitcoin falls, the miners are forced to sell more of their coins to support themselves, creating selling pressure. Although halving has the same impact on miners‘ earnings as halving the price, its impact on the market is not the same. All other factors being equal, the miners do not have to sell more coins to continue operations.