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With Bitcoin halving set to take place on May 12 and 22 days left, institutional investors are catching the fever and can’t help taking advantage of the crypto asset’s huge opportunities.
Bitcoin halving has become the internet new order, with its searches scaling by the day. With a lot of anticipation leaning on a possible bull rally, institutional investors are rushing to claim a share of the pie. The block halving event is scheduled to take place on May 12, 2020, whereby the Bitcoin mining reward to miners will be slashed by half from the current 12.5 BTC/ 10 mins.
Bitcoin halving is a major event that signifies the decline in BTC supply from miners to the market. It has happened two other times, 2012 and 2016, after completing 210,000 blocks before the next event. Bitcoin is mined with the knowledge of finite end in its supply, whereby it is meant to reach 21,000,000 coins at the end of the last block, approximately 2140.
The 2020 halving event has several additional factors than previous events in the past. First, the advanced technology in the mining devices has affected the miners’ profit margin, and secondly, the ongoing coronavirus pandemic has made the factors more complex for the crypto asset industry.
Tradeblock’s Analysis of Pre and Post Bitcoin Halving Event
However, the Tradeblock platform has critically analyzed the previous halving events and given their prediction on the oncoming may event. Their analysis has been favored by the increased institutional investors eyeing to take advantage of the pre and post halving volatility.
According to Tradeblock’s analysis, the Bitcoin price rose prior to each event, hence allowing miners to maintain healthy profits. The analysis also noted that the miners’ profits were slashed by half after the event. The Bitcoin hash rate in the previous events did not experience a dramatic uptick, as the miners were bagging home considerable profit margins.
The report went ahead to use the previous years’ analysis to predict the possible scenarios as we approach the halving event and the aftermath. The report estimated that miners are currently breaking even at approximately $7,300 per coin, despite the market price playing around $7,000.
Following the 2020 halving, the report suggests that the mining breakeven will rise to between $12,000 and $15,100 per coin. These figures used the assumption that the hash rate will stay unchanged or rise following a modest growth rate.
Institutional Investors Comes In
With all factors pointing towards price breakout to a possible new all-time high, institutional investors are moving fast to invest in both the crypto asset and also its future contracts.
One of the notable institutional investors is the Renaissance, through its Medallion Fund, whereby it has selected the CME cash-settled Bitcoin futures. Another notable firm is Grayscale Investments, which experienced a record inflow into its Grayscale Bitcoin Trust of more than $338. Million
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