How will Bitcoin halving ‘shake’ the cryptocurrency market in 2020?

Bitcoin halving likely to lead to higher volumes and extreme volatility.
Traders, miners and investors are planning on how to make the most out of the May 2020 halving.

The creator of Bitcoin, Satoshi Nakamoto incorporated a rule into the code that executes Bitcoin that sees mining rewards slashed by half every four years. The impact of the reduced mining rewards leads to a reduction in the supply of the coin. The event is known has halving and is scheduled to take place in May 2020.

The reduction in the supply of Bitcoin will affect the players in the market differently considering Bitcoin's total market cap is only $120 billion. These players include miners, traders and investors. They are all looking forward to making the most out of the halving.

Meanwhile, some of the fundamentals likely to be affected immensely are volatility, supply and demand of Bitcoin. Rapid gains and losses due to extreme volatility will characterize Bitcoin’s market after halving. Therefore, losers and winners will rub shoulders but for now, anticipation is growing on how participants will take advantage of the event.

Traders, particularly are expecting higher volumes and extreme volatility. However, the reduction in supply could spike the prices to higher levels. Other parties that benefit from high volatility are quantitative hedge funds and high-frequency traders who mainly make money from price swings.

Share: Cryptos feed

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.