Search LOGIN

Week Ahead, May 11

Short Description

What will Halving Mean for Bitcoin? The biggest event on every crypto trader’s calendar is happening this Tuesday – the Bitcoin halving. The price of Bitcoin crashed 50% in March but has amazingly recovered that entire big decline in large part because of big expectations for this event. I give my take on what this could mean for Bitcoin as well as preview the week ahead for financial markets.

Video Script

Hi everyone, the biggest event on every crypto trader’s calendar is happening this Tuesday – the Bitcoin halving.
The price of Bitcoin crashed 50% in March but has spectacularly recovered that entire big decline in large part because of big expectations for this event. Put simply, from Tuesday onwards Bitcoin miners will only get half the number tokens for the same amount of mining. So in this video I’ll give my take on what this could mean for Bitcoin as well as preview the week ahead for financial markets. Now before I rundown the top things to watch in the economic calendar this week, can I ask that if you’re interested in trading crypto currencies and you’re glad I’ve made this video, please click that like button and the YouTube algorithm will make sure more people see it, which means we can keep producing more free content.
So you’ll see a big theme across this week is first quarter growth statistics. We have Q1 GDP results from Japan, the UK, Germany and the Eurozone. As you might expect, the general picture is of falling growth in Q1 however what markets really fears is how bad it is in the current quarter i.e. Q2. The RBNZ decides interest rates for New Zealand but I don’t expect any change, just a review of how the QE program is going. The kiwi could benefit if Governor Adrian Orr says asset purchases have been reduced recently because it means less money printing. Then lastly its China and US retail sales. Apparently retail spending saw a big recovery in China over the May Day holiday but is still expected to be down as of April. So the number of new Bitcoins entering the market as of Tuesday will be cut in half. Markets are supposed to work according to the laws of supply and demand so if new supply is cut by 50% - even if demand growth stays constant – economic theory says the price of any asset should rise. Of course theory doesn’t very often match reality – but it just so happens that after the last halving the price of Bitcoin went on a monster rally.
Halvings are supposed to take place every four years and the last one was in 2016 and the year after that, Bitcoin absolutely took off, going from under $1000 to nearly $20,000 in less than a year. Of course the big question is – does something similar happen again this time? The price is around 10,000 now – if the price rose by the same factor this time, we’d be looking at around $200,000 per Bitcoin. So let’s start with what in my view is the biggest risk – the price has more than doubled in two months so the effect of the halving might already be in the price. That’s how markets work – they price in events before they happen. But here’s the really interesting contrast in my view – while central banks are trying to print as much new fiat currency as possible to contain the economic crisis from the coronavirus – the opposite is happening to Bitcoin which of course can only every have a maximum supply of 21 million.
Good luck with trading this week, and make sure to subscribe so you don’t miss our next video.

Topics :

UNLIMITED ACCESS!

The best way to keep track of your accounts. Get notifications
and access your dashboard any time!

Open a live or demo account, make secure deposits or get latest
market updates for free!