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Bitcoin Cash Halving Giving a Clue About the Future of Bitcoin

14 April 2020 17:00, UTC
Bitcoin Cash Halving Giving a Clue About the Future of Bitcoin
By Nick James

Every once in a while, cryptocurrencies go through halving, the event when the rate at which crypto is being mined halves. Thus, for every verified transaction, a miner will not get half as many of the currency. Halving boosts demand and price for currencies significantly. Bitcoin has done it three times, with another one anticipated to take place this May, in just over a month.

Bitcoin Cash is a forked currency of its big sibling Bitcoin. Launched in 2017, BCash now is the fifth largest digital currency by the size of market cap. BCash recently went through a halving after which rewards dropped from 12.5 to 6.25 coins as inflation fell to 1.80%.

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BCash is a major virtual currency widely recognized around the world. There are currently 18.37 million Bitcoin Cash coins in circulation globally while the total supply stands at 21 million. With the halving event, the overall mining reward is expected to significantly slow down.

Unlike Bitcoin itself, BCash, still much weaker than the big sibling, struggled a lot amid the coronavirus outbreak. From mid-January onwards, the currency lost more than half of its value and still is having a hard time maintaining itself at roughly a $200 mark.

What does this mean for Bitcoin?

The thing is that even the announcement of the halving event usually has a major impact on the currency’s price. Bitcoin has had this experience before, along with altcoins of different kinds. Even Litecoin managed to stabilize itself and under such trends, BCash is seemingly having an issue.

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The destabilization of BCash made many believe that Bitcoin would soon share the same fate despite the upcoming halving event in May. However, according to the counter, the figures for Bitcoin are looking the best in a long time. It manages to keep the price tag at $7,000 in a stable manner without much turbulence. This is particularly impressive considering the global health emergency around the COVID-19 pandemic.

Importantly, it is worth noting that Bitcoin, for the first time, enjoyed a major number of investors turning towards it as a safe haven asset. The pandemic that panicked markets from Seoul to New York and London caused a big hunt on safe havens and for many, Bitcoin became the right choice. There is no evidence that crypto is becoming a widespread asset, however, it has visibly contributed to Bitcoin’s success in the last few months.

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At this point, without knowing the precise outcome of the halving event, it is difficult to tell whether Bitcoin will fail to reach its goals or not. However, for those who believed that BTC would follow the footsteps of BCash can be certain that this will not be the case, at least this time.

Image courtesy of Somag news



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