Bitcoin’s halving a test of the asset class’s core investment thesis
Matt Chwierut, Director of Research at leading blockchain research firm, Smith + Crown, is the latest to give his input on the upcoming halving event and Bitcoin‘s dominance this year. In a recent guest article, Chwierut considered key developments in the blockchain space, developments that are likely to influence the determination of price action over the year, such as the upcoming Bitcoin halving event.
According to the Smith + Crown research director, regardless of whether the halving contributes to a rise in Bitcoin’s value or not, the event is “likely to emerge as a major determinant in the broader crypto markets during the year ahead, given Bitcoin’s outsized influence across the entire space.”
Chwierut also spoke about how the event is slowly, “taking shape as a test of the core investment thesis of the entire asset class,” specifically addressing the collective belief that a scarce instrument maintained by an entire country’s energy consumption can gain acceptance as a monetary store of value.
Chweirut also pointed out how there are no 100% good outcomes for the halving event. A bear market would deeply shake the conviction that crypto is ready for global acceptance and a bull market would raise the confidence of those who believe that larger bubbles are in store for Bitcoin. Further, an ambivalent market would suggest a weariness with the asset class and “no real shift in power between those who think Bitcoin will go to zero and those who think it will go to the moon.” He added,
“Other explanations will surely present themselves but make no mistake, this will be a pivotal moment a decade into crypto.”
Chwierut also spoke of how a reversal in Bitcoin‘s dominance would imply increasing value accorded to other assets in the space, which, in turn, would “suggest greater market comfort with the wider applications of blockchain technology than Bitcoin itself offers.” He also said that if such a trend were to occur in 2020, its recognition would fuel its acceleration “with a recursive impact that could ultimately prove far-reaching and impactful.”