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.

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