The Halvening – Good or Bad?
We are now over a month removed from of the world’s most popular digital currency, Bitcoin. The price has jumped from roughly $8600 before the halvening to where it now stands at roughly $9500 with many pundits expecting BTC to soar higher.
Every four years, miners who use considerable electricity and technology see their rewards cut in half (thus, the halvening).
In the most recent halvening event they saw a drop from 12.5 block rewards to 6.25 for the next four years. Prior to the halvening of May 11th miners produced 1800 BTC per day but that number has been cut by 50 percent to 900 BTC per day.
But if you’re not a miner then how does this affect the average Bitcoin investor? Well, the bigger picture is how Bitcoin has fared throughout the global pandemic wreaking havoc on the markets.
And in fact, it has fared well during what many traditional bankers and financial houses are referring to as a “stress test”. Even J.P. Morgan, as old school an investment house as there is, has tacitly changed their tune regarding Bitcoin and is now warming to the idea of digital currencies.
The and cryptocurrencies as a whole have “longevity as an asset class.” That’s about as stunning a compliment as you’re likely to get out of a financial institution that was an outspoken critic of cryptocurrency until recently.
Jonathan Hobbs, the CEO of digital asset hedge fund Ecstatus Capital, shared his views regarding the recent traditional institutional interest in Bitcoin.
Hobbs explained: “The Fed’s bond-buying program has increased its balance sheet by about $6 trillion since the 2008 financial crisis, with about half of that coming from its fourth round of QE earlier this year.
As a result, more investors are seeing Bitcoin as a potential hedge against inflation. The Bitcoin halving has certainly played into this narrative. Institutions are also seeing Bitcoin as an uncorrelated asset with good risk to reward.”
Bitcoin Becoming More Widely Accepted
Bitcoin is not only an investment but also a means of transacting commercial transactions online. And the emergence of cryptocurrency becoming more widely available and welcomed by online retailers has broadened its appeal.
We’ve seen Microsoft, Nordstrom and Whole Foods warm to the idea of allowing customers to transact via Bitcoin but now smaller merchants are also finding that BTC is the way to go.
Over 80,000 businesses accept Bitcoin and there are never any conversion fees that you would find associated with changing from one currency to another, but there are of course .
Yet those fees are much lower than the traditional credit card charges which is another reason why merchants are welcoming Bitcoin.
And it is also one of the most liquid and immediate ways to transact. Those getting paid by Bitcoin will often have their money within minutes if not seconds from a payout request.
But the embrace of cryptos over credit card purchases is still hugely tilted in favor of the typical Mastercard, Visa, and American Express.
Jean-Michel Daumas, the owner of the Paris-based lingerie company, Lola Luna, explained that although digital currency is becoming more widespread, it is still not exactly common, “People are not ready to pay with crypto.
They prefer to keep it rather than spend it,” Daumas said.
“I prefer to receive payments in crypto because they are more secure for me. For example, when I receive payments from PayPal, some people cheat and say they didn’t receive the goods.”
However, in the world of online sportsbooks, Bitcoin is more than welcomed at all of the top-rated books, like the aforementioned Bovada, and it serves American bettors particularly well as credit card transactions for online gambling has been prohibited by the U.S. government for several years and it becomes a cloak and dagger routine to fund an online account from a residence in the United States.
However, Bitcoin has changed the game, and not only is the transaction immediate but the fees are far lower.
Experts believe that not only will , but its acceptance will be even more universal as it becomes a more mainstream financial investment vehicle.
Disclaimer: The content of this article is sponsored and does not represent the opinions of Finance Magnates.
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