Top analysts see changes in BTC around halving

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Bitcoin

Amid dire long-term projections for global economies, analysts are suggesting that the Bitcoin halving event planned for May might not be the booster it was supposed to be for BTC value.

In a rare co-authored article at Coindesk, Bradley Keoun and Omkar Godbole talk about how Bitcoin is “searching for a direction” and how massive fed injections of trillions of dollars could affect cryptocurrencies.

“After a wild couple months in crypto markets that saw a ferocious sell-off as the coronavirus spread, followed by a 30 percent price rebound as governments and central banks announced trillions of dollars of emergency financing, the oldest and largest cryptocurrency has settled into a range between $6,700 and $7,400,” the two write.

Then there’s the specter of unintended consequences coming out of U.S. Federal Reserve actions. The authors quote Delphi Digital cofounder Kevin Kelly on the likely need for more assistance as economic contraction wears on:

“Put simply, the U.S. economy cannot endure months on end of little to no revenue without government support,” Kelly reportedly contended, echoing some of the concerns of mainstream economists who find that rampant inflation may be impending.

Interestingly, Kwoun and Godbole also cover remarks by Goldman Sachs representatives that fixes by policymakers are floating the market for now.

They also introduce the concept of Bitcoin “backwardation” – described as a situation where futures contracts traded the discount to the spot price. Keoun and Godbole provide a chart of this phenomenon, describing likely impacts this way:

“The discount could signal that traders are betting on price declines over the next two months, in a shift from last week when futures were trading at a premium.”

If traders are trading on price decreases right over the May halving, that is indeed, in the words of the authors, a “buzzkill” for hodlers. We’ll see…..

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