Why most companies don’t care about the BTC halving

The third halving of bitcoin is less than two weeks away. Google searches show a great interest in this event, the third in the history of bitcoin, the oldest cryptocurrency around.

However, some traders say halving would not be the bullish trigger that many expect, according to them it doesn’t matter. Alternatively, they choose to focus on other macroeconomic catalysts that can boost Bitcoin’s prices in the next months and years, including unparalleled monetary policies of the central bank.

What is BTC halving?

As bitcoin is only backed by what people are willing to pay for it and nothing else, the cryptocurrency can experience tremendous fluctuations in its value, halving representing one of the forms this can happen.

The bitcoin protocol states that the reward for adding a block will be halved every 210,000 blocks, which happens approximately every four years. Eventually, the reward will go down to zero, reaching the limit of 21 million bitcoins by the year 2140; record-keeping is then only recompensed by transaction fees.

In other words, at bitcoin’s inception, the monetary policy was based on artificial scarcity that the total number of bitcoins should never reach 21 million. New bitcoins are generated approximately every ten minutes and the rate at which they have produced decreases by about half every four years until all are in circulation.

Since Bitcoin came about in 2009, the cryptocurrency has already halved two times. The first bitcoin halving happened on November 28th, 2012, which saw bitcoin’s price increase from $11 to $1,000 about a year later. The second halving took place during July 2016 and the price of bitcoin was trading at around $700, and in 2017 the price rose to $20,000.

The data from the previous two halvings show that when the supply of bitcoin declines during the halving, the demand remains the same, driving the prices up. Based on the previous ones, the same price increases can be expected in the upcoming one.

Why most people don’t care about the halving

With the third halving approaching, many people who are involved in the bitcoin market should be worried about the consequences. However, those who are well established don’t really care about the upcoming event.

Over the years, the use of crypto in day-to-day lives has significantly increased, leading to more people having a stake in the events of the market than ever before. People have started using bitcoin for everything from charity work during the ongoing global pandemic to gambling on online casino platforms. Many choose to gamble with bitcoin thanks to its safety and anonymity.

Bitcoin is also used extensively in the gambling industry. Playamo Canada has numerous games for players to gamble using cryptocurrency. Crypto deposits give players more options to gamble, boosting their win rates. Tajir Sengupta of Playamo Canada, who has been around the crypto industry long enough to witness the 2012 and 2016 bitcoin halvings, says he hadn’t been expecting much from the event. His customer base is also less likely to be affected by the upcoming halving, some new players might even join, as he said, “The price is just one side effect of how much adoption you get in the world.”

As more and more people embrace crypto as the future of currency, it is destined to become even more popular, eventually raising its price significantly. From the Red Cross receiving donations in crypto to US congressmen seeing it as a way out from the COVID-19 crisis, bitcoin has already established itself in the mainstream consciousness.

Eleven members of Congress called on the U.S. Treasury Department to look into the new technologies, including blockchain and DLT in order to aid how cash and supplies are distributed under a federal law trying to boost the economy during the COVID-19 crisis. “Such steps will ensure both that America retains its technological advantage and that relief is delivered quickly to the small businesses and individuals who need it most,” read the letter.

Some experienced investors are even saying that the halving won’t affect the price, as it’s expected by most people in the business. As early as last year, Morgan Creek Digital co-founder and partner Jason Williams said in an interview that the halving would have a minimal impact on the bitcoin price because it’s been anticipated years in advance by both investors and miners.

“For the community that is living this day to day, they know the event is there. They even know the date (within a few days). Large miners that are holding BTC will have to sell to cover operational expenses or use cash as revenue halves.

New buyers have to come in to move this market up. So other than a new headline, the halving is being dealt with now by those who are operationally affected by it. Those that don’t will be priced out of the mining business,” Williams said.

It remains to be seen within the next couple of weeks, and eventually in a year, which predictions become true. While Williams might be right that more people are aware about the halving and when it will occur, we still can’t neglect the data from the previous two halvings suggesting that the price will surge within a year.