Mining Pool CEO Casts Doubts on 2020 Halving Impact
Mao Shixing, the CEO of F2Pool, the world’s sixth biggest Bitcoin mining pool, has stated his belief that Bitcoin’s next halving will have “little impact” on the market. Due in 2020, the halving will see the coin reward for mining new blocks cut in half, an occurrence that has historically resulted in a huge increase in the price of Bitcoin. As such, many crypto enthusiasts are of the belief that the 2020 halving will act as the next big catalyst, but it seems that not everyone is in agreement.
Halving of Expectations?
The Bitcoin halving occurs every 210,000 blocks, with the next one predicted to come in May 2020, where the block mining reward will drop from 12.5 Bitcoin to 6.25 Bitcoin. The first halving in 2012 sparked a bull market that saw Bitcoin rise from $10 to $1,000 within a year, while the second one in 2016 came in the middle of a two-year bull run that ended with Bitcoin hitting $20,000 by December 2017.
Some extrapolated charts have Bitcoin sitting anywhere from the $100,000 to $200,000 mark by the time of the 2020 halving, but Shixing clearly doubts the power of this. He recently addressed this issue in interview with jinse.com, “For halving, everyone has a clear psychological expectation, so there is little impact on the bitcoin ecology as a whole.” This psychological expectation is reflected in the conversation about the halving within the crypto community, almost all of which sees it described as an inevitable price catalyst, so Shixing’s preaching of caution is an interesting, if slightly gloomy, standpoint from an informed source.
The Silver Lining
As worrying as Shixing’s prediction sounds, it may be laced with good news. The previous two halvings occurred before the 2017 bull run shot Bitcoin into a wider consciousness, and so their impact may have been felt at the time. Whereas with discussions about the impact of the 2020 halving starting 18 months in advance, investors may find that the price increases anyway on the basis of expectation alone, so the actual event is ‘baked in’ to the price. This would render Shixing’s theory correct, as the halving event would then have very little impact on the price, which would already be higher.
Such a phenomenon might be witnessed in February 2019, when a final decision on the Van Eck SolidX ETF is due. If there is strong evidence that it will be granted, then the price will rise to reflect that in the run up, giving little or no room for further growth upon the announcement itself. Time of course will tell, but the bulls could do with all the ammunition they can muster at the moment, and they won’t be happy if a year and a half of waiting doesn’t pull them out of the grip of the bears.