Bitcoin’s emergency as the first digital currency and its subsequent adoption in the mainstream financial sector as legal tender in some quarters is a positive acceptance of its utility as a means of exchange.
Big industry players from outside the cryptocurrency ecosystem are continually keying into the market and adopting performing cryptos, especially Bitcoin, as a form of investment in their bid to expand their businesses from the financial perspective of exchange.
As more and more mainstream big guns move into the crypto industry, there has been a nagging problem that has to do with Bitcoin’s performance in particular and its price action in general.
Bitcoin traders and investors are now at a crossroads about navigating the problem posed by the once dependable template, the Bitcoin halving system.
The Bitcoin Halving System
The Bitcoin halving pattern is when the rewards for mining Bitcoin are divided into two; they are cut in half. The halving was carried out to control the inflation rate and the circulation of new Bitcoin in the market.
In essence, halving the rewards of mining Bitcoin limits the supply of new coins so that the price may rise when demand is strong enough.
Why Does It Matter?
The importance of the Bitcoin halving cycle to the long-term performance of the token is not in doubt as it serves as an automatic control of price volatility and correction most of the time. Investors use it to predict the long-term direction of the BTC.
However, many analysts are coming to terms with the fact that the Bitcoin halving cycle is rapidly changing due to the periodic rise and fall in the world’s biggest crypto value.
An analyst from Crypto Quant, a cryptocurrency consultancy firm, noted that crypto traders are now in possession of more technical knowledge about the market intricacies of digital currencies and that whales are now more likely to make informed decisions based on the idea of what to expect and not based on emotions.
The analyst believes that the traditional halving system is no longer as strong as before due to the rising support and growth of the cryptocurrency community and their influence on most things.
The most important thing to consider here is the position Bitcoin occupies and the increased adoption of cryptocurrency globally, coupled with the involvement of big players from the mainstream financial sector in the crypto industry. All these reasons given by experts show how Bitcoin’s halving cycle is rapidly changing.
Experts also point to the rising relationship between Bitcoin and the S & P 500, including the stock markets and the tech industry as a whole. The most worrying aspect for many here is that Bitcoin might not be enough to store value or serve as a hedge against inflation because of its close relationship with these traditional assets.
Notwithstanding, analysts also seem to argue that Bitcoin’s relative movement with some of these conventional financial markets appears to be another grey area to address.