Analysis & Opinions

A Trader’s View on the Bitcoin Halving and Coronavirus

Craig Cobb of the TraderCobb Crypto Show has been investing since he was 16 years old. Before entering the world of crypto trading, Cobb worked in traditional stock markets, FX and commodities and bonds.

The last time the block reward for Bitcoin mining was halved was in July 2016. Since then, the crypto markets have matured. 

Today, we have several financial institutions exploring the cryptocurrency and blockchain space, including the CME Group, CBOE and ICE. Even the Intercontintental Exchange’s crypto arm, Bakkt, is thriving in the digital assets space.

Furthermore, we’ve got more margin and derivative products, not to mention there are a lot more people in the market than before. 

The entire market capitalization may have dropped significantly off its all-time high, but it’s still exceedingly higher than in 2016. But it’s not just the markets that have matured.

The crypto community today doesn’t think the same way they did back in 2016-2017, which is a relief. But with the Bitcoin halving five days away, there are various talks lately about the price.

How Will the BTC Halving Event Affect Price?

Some believe that Bitcoin, or even the entire cryptocurrency market, will see another round of exuberance once again. Perhaps it will shoot up to the moon as it did in 2017. While I think that it’s a definite possibility, it seems that BTC is already priced in by the looks of it.

Why? We haven’t seen that much bullishness from the market. The halving is less than a month from now, yet we’ve barely recovered from the recent price falls. And speaking of which, we saw BTC’s price crash 45% in one day last month.

Now does it mean this is bad for Bitcoin? I don’t think so. But that’s only my opinion. 

I do think that the market will simply continue ticking along as it does. There will likely be a gradual move higher post-halving. This could mean more trading opportunities for all of us. But don’t expect to see Lambos on the moon just yet.

Coronavirus Can Aid Bitcoin

So if the Bitcoin halving won’t stimulate the cryptocurrency market enough to skyrocket, what could? Unfortunately, the fastest way Bitcoin price could make a big move up is if we see a second round of this coronavirus pandemic taking hold, which is something you should not wish for.

But what does COVID-19 have to do with this?

Well, if we take a look at the equity markets around the world, they’re basically in a position whereby they’ve priced in the first wave of the pandemic. The stimulus packages seem to have worked in holding the market and bringing it back up a bit. 

Now, despite having many businesses across the world either laying off their employees or shutting down, the market keeps going. We are, for the most part, seeing a relatively strong market climbing its way back off of its lows. 

The S&P 500 has actually moved 30% off those lows. That is a very significant move for this market. The stimulus has worked for the first time around.

Unemployment rates may be rising, but the market has bounced back. Will we see it move lower? Well, that depends entirely on whether there’ll be a second outbreak or not.

China might already be going through that at the moment. It appears that there seems to be a second outbreak starting to trickle there. 

Now, heaven forbid, we see that actually happening. I really hope we don’t, because I’d love for things to get back to normal. 

But if we do see a second outbreak come, I think it won’t be priced in, because it will mean further job losses, and hence, more stimulus is required. And at that point, if and only if, Bitcoin can hold its ground or move higher throughout the period, it would set itself apart from other assets. 

Only then could we have an opportunity to see the crypto market set things on fire, in the short, medium and long term.

Conclusion

As it appears, things aren’t looking very bullish. We’ve seen volatility dry out in the last month and there hasn’t been a great deal of movement. As far as today, neither the halving nor the coronavirus is pushing Bitcoin and the altcoins up.

This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice. 

The views and opinions expressed in this article are the author’s own and do not necessarily reflect those of CoinMarketCap.

TraderCobb is regarded as one of the top trading educators in cryptocurrency right now. His easy to follow checklist-based strategies means that anyone from a complete beginner can learn to trade like a pro.

10 comments on “A Trader’s View on the Bitcoin Halving and Coronavirus

  1. John Davis

    The article is superficial in its analysis. The reality is that huge uncertainty remains regarding how if and when economies can recover from Covid. Huge QE stimulus by central banks and governments has buoyed equities markets but how if and when Covid paralysis will be resolved remains unknown. There is much talk about a vaccine as the holy grail- well is there a vaccine for AIDS yet? Nope, not after 40 years of trying. Much more likely is that as with AIDS there will be a series of treatments and therapies developed which can reduce the severe reaction Covid provokes in a minority of people when infected. An efficacious treatment could emerge next week or it could take years. Equally others mechanisms could emerge. Will Swedens attempt to develop herd resistance succeed? Maybe. Will accurate infection detection be developed which re enables international travel be found? Maybe. Again uncertainty is the only current certainty. There are limits to how long QE stimulus can cushion fiat based assets like equities and property. If there are no efficacious responses found to Covid within 6-12 months fiat collapse contagion is probable. Parallel to this is the development of DCEP which has far greater negative interest rate potential and Chinas ambition to displace the USD$ global interbank hegemony.
    Bitcoin is well positioned to cope with all this uncertainty.

  2. In the second paragraph at the top it says, “NASDAQ’s crypto arm Bakkt.” But to my understanding Bakkt is the Intercontinental exchange’s crypto arm. No?

    • Craig Cobb

      You are correct, it is an ICE product not NASDAQ

  3. Enzuccio

    Bitcoin halving from when the blocks now reaches 630,000 blocks from 21,000,000 bitcoins really this only reduces miners rewards but the projects of many combing from this halving is really makes the change of the rise price. So many other exchanges becoming involved now and also having NEW Bitcoin blockchain banks now from Switzerland and Wyoming.

  4. Ricky Esclapon

    “We’ve seen volatility dry out in the last month and there hasn’t been a great deal of movement”. March 16th global market cap was 132B and it is currently sitting around 242B on May 10th after a sudden drop from 265B, that not volatile enough for you? Also at the start, he says “And speaking of which, we saw BTC’s price crash 45% in one day last month.” and the price has doubled again, not sure how he comes to the conclusion that volatility has dried out.

    • John Davis

      Bitcoin drop accurately preceded and predicted the drop on equities that followed later that week. BTC trades 24/7365 with no trading halts, government subsidies or bailouts. Fiat debt leveraged equities and property may be cushioned in the short term via market intervention by central banks but only Bitcoin accurately and in real time reflects and responds to the underlying market realities. Truly free markets are inherently volatile and responsive to changes in real world risks and opportunities..

    • The week or 2 leading to the halving, volatility had dried up significantly

  5. Petrus de Courtrai

    interesting. Does the sudden drop of 10% last night change things at all, you reckon ?

    • The conclusion of the whole post was not written by me.

      The fall did not and has not changed anything.

  6. slapyourselfCZ

    wow, if you would have listened to this article you would have missed out on 20% gains over the last 2 weeks. i guess not even the “experts” know what will happen.

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