Bitcoin’s May halving will produce a ‘very clear bull market’
There have been a lot of narratives spun around Bitcoin’s upcoming halving, which is slated to happen sometime in May 2020.
For example, Galaxy Digital CEO, Mike Novogratz, in a recent interview noted that BTC had the potential to reach and even surpass its all-time highs of $20,000 by May’s block reward halving. Litecoin’s creator Charlie Lee also made his predictions and stated that Bitcoin might follow the same pattern as Litecoin, post the halving.
The latest to comment on Bitcoin halving is Clem Chambers, CEO of ADVFN, Europe’s leading stocks and shares website. In a recent interview, he noted that Bitcoin halving would produce a “very clear bull market” for prices. Additionally, he also noted that Bitcoin’s price has been moving up at the moment and that it might continue up to the havening and probably even follow the same bullish trend even after the halving.
On the other hand, the halving has also got many people talking about Bitcoin’s status as ‘digital gold‘. In fact, Bitcoin became more correlated with gold than all of the major altcoins in the second half of 2019 and the narrative has started to take hold. Additionally, in January, the correlation between gold and Bitcoin reached its highest level and this further strengthened the narrative.
During the course of the interview, Chambers was asked about his thoughts on Bitcoin’s digital gold narrative and Chambers, in response noted that Bitcoin had a lot of characteristics that made it better than the gold.
He further stated that Bitcoin was much easier to carry while traveling when compared to gold, and declared that Bitcoin was the “flight asset of choice” at the moment.
Expanding on the same, he stated,
“Bitcoin is something that you can trade and turn into money very, very quickly and very, very easily. And think about it, if you had to leave America tomorrow with say a half a million dollars, how would you do that? If you didn’t have a bank account abroad, and even if you did, how would you get the money to that bank account in these days of KYC and AML? This is making more of a case for Bitcoin.”
Peter Zimmerman, senior economist at the Bank of England (BoE), also recently published a staff working paper on the price of Bitcoin and other cryptocurrencies, where he talked about Bitcoin’s “digital gold” effect. Claiming that that Bitcoin’s mechanics cause people to treat it like gold, he stated,
“When cryptocurrency is more valuable, households become reluctant to spend it on fees. Instead, they prefer to hoard it and endure slower settlement times. I call this a ‘digital gold’ effect: when cryptocurrency is more valuable, agents view it as an asset to store, rather than money to spend.