The upcoming Bitcoin halving is called since years as a potentially bullish catalyst for the crypto-currency as many investors suspect that the impact on the Mining dynamics will drive the price of BTC in the amount.
However, it is important to note that there are some problems with this idea and a recent report of a crypto-Hedge-Fund suggests that the bullish Halving Statements are based on false assumptions.
Now, a statistical model that takes into account a Wealth of options, the price formation after the halving seems to support this theory, since only a small minority of simulations considered a strong bullish price movement in the time immediately after the event.
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Bullish Bitcoin halving is corroborated by “false assumptions”, according to Hedge Fund
The Seattle-based crypto-Hedge-Fund Strix Leviathan recently said that the vast majority of the statements around the Bitcoin Halving responsible is based on incorrect assumptions. It is expected that the event will occur in 21 days, in the short term, largely bullish, as the reduced block rewards the Miner to sell your mined Coins until the price will go up.
This will alleviate the steady stream of selling pressure, which is exerted by the Miner on Bitcoin, and thus room for an increase in the game. Nevertheless, Strix Leviathan notes that this statement depends on the assumption that the Miner currently sell all your crypto-currencies, once you have it dug out of the ground – what is wrong.
“Reality – Not all of the rewards of the Miner will be sold. A considerable amount of mined BTC is located in the balance sheets, since the Miner can use both, speculate as well as BTC-secured loan for the management and expansion of their businesses. The impact of a supply-side reduction in price is at best uncertain and, at worst, minimal.“
Simulations show that a halving is not likely to catalyze the big bull run
Re-performed economic simulations seem to confirm this sentiment and suggest that a incredibly low probability that the halving takes the Bitcoin to a lot of bullish price action.
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According to the simulations of Skew – a Blockchain-analysis platform, the results of 100 simulations, announced in a recent Tweet sent only 5%, with a Bitcoin price of about $9.000.
“The option market priced in a limited amount of additional volatility, which is related to the halving of the Bitcoin price in the next month. We simulated 100 iterations for the path of Bitcoin in the next month using the implied volatility of 19. May of 80 %. 5 of the 100 series ended > $9.076, and 5 < $4.947.“.
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This model has been performed using the implied volatility from may 2019, but a similar Trend is observed in the implementation of the same model using the volatility from December 2019, with the result that 5% of the simulations with Bitcoin at over $25,000, while 5% with Bitcoin at under $1.300.
These models suggest that it is statistically likely that the bisection will not lead to a Bitcoin will immediately experience a huge bullish volatility – what could be for the investor with a disappointment.
However, the Bitcoin price has moved in the last half adjustments until months after the Event has been strongly upwards. The last Halving was exploded in 2016, and the Bitcoin exchange rate reached its peak in December 2017, in the Bitcoin buying interest.
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