Forex in this article
• Data from the options market give little hope for a new record high
• Still a positive effect possible through halving?
The Bitcoin price, like many asset classes, has been hit by the Corona crisis in the recent past. Although he was able to recover somewhat in the meantime, new highs now seem rather unlikely due to current developments.
Could bitcoin halving rally in May?
Bitcoin halving in May could have a positive impact on the course of cyber currency. In this event, the mining reward will be reduced from 12.5 to 6.25 BTC, or half. As a result of the smaller increase in the supply, analysts hope for a positive effect on the price. “In the past, halving rewards has led to tremendous economic growth for Bitcoin and other cryptocurrencies,” said coindesk.com Brandon Mintz, CEO of Bitcoin ATM provider Bitcoin Depot. Matthew Dibb, co-founder and COO of Stack Funds, also expects the May event to spike the Bitcoin price in the next two months. In anticipation of a rapid appreciation after halving, investors would take positions that could further boost the market valuation of bitcoins, explains Dibb, as coindesk.com reports.
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Options market data make hope fade
Although there is still hope for a rally in the market due to bitcoin halving, data from the options market show a very low probability that bitcoin could reach a new all-time high this year.
According to the crypto-derivative analysis company Skew, the options market has only a 4 percent chance that Bitcoin will be above $ 20,000 before the end of the year, as coindesk.com reports. Bitcoin is more than 16 percent likely to end the year over $ 10,000, while the likelihood of prices hitting the June 2019 high of $ 13,880 through December is 8-10 percent.
The likelihood that Bitcoin would cost more than $ 6,000 by the end of April, before the halving event, is over 50 percent. According to option data, the fact that the prices are in the five-digit range is only four percent likely. While Bitcoin will find acceptance at over $ 10,000 by the end of June after the halving event, data is likely to be 12 percent, according to data, and this likelihood will increase to 16 percent by the end of September.
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Monetary policy measures could support BTC
Some analysts believe that Bitcoin could still benefit from the current situation, more specifically from monetary policy measures by central banks and governments around the world that are designed to dampen the economic impact of the Corona crisis. “The cryptocurrency can reach an all-time high as the macroeconomic background with trillions of dollars of liquidity to enter the system is quite optimistic,” said coindesk.com Mike Alfred, CEO of Digital Assets Data. Luuk Strijers, CCO at the Crypto Derivatives Exchange Deribit, also sees the opportunity that the measures taken by politicians and central banks could lead to Bitcoin being increasingly used to hedge against the depreciation of fiat currencies. Ashish Singhal, CEO of the CoinSwitch.co exchange, assumes, however, that an upturn for Bitcoin will only come in the third quarter, since the correlation with the stock markets could continue in the second quarter.
Bitcoin is currently trading at just over $ 7,000 (as of April 6, 2020). He is now roughly back to the level at which he started the new year. However, it has clearly moved away from the interim highs of more than 10,000 and at times almost 10,500 US dollars in February, with more than minus 30 percent.
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