With the recent Bitcoin price increase, the upcoming halfway activity has started to attract media attention. The CNBC media outlet claimed that BTC would rise suddenly, with an emphasis on the upcoming halfway. The interesting thing is that; Whenever mainstream media outlets made remarkable comments about the crypto market, it was seen that assets entered the bear market.
CNBC Believes Bitcoin Will Rise
Bitcoin’s latest price hike was discussed in the CNBC Quick Money program on Friday. Cryptocurrency supporter expert Brian Kelly has expressed her views on the current situation and commented on the halfway:
“While the whole world is doing monetary relaxation (QE), Bitcoin is about to make monetary tightening. This phenomenon does not mean that the price of the asset will be halved, it just means that the daily supply is halved.
In the past, these halves were a catalyst for huge increases. We have seen this in this halfway; reached the level of about $ 9,000. However, if we think about it in the medium and long term, you will have an asset that will be less than gold compared to the stock-flow (S2F) model in an environment where the world is printing money. ”
Kelly added that Bitcoin miners will receive fewer rewards after splitting, adding that “weak” miners can be eliminated. However, Kelly stated that 30 to 60 days later there would be a “nice increase again”.
Monetary Relaxation vs. Monetary Tightening
Kelly also discussed the comparison between monetary relaxation and tightening. The US government has committed to implementing an “unlimited” monetary relaxation system after reducing interest rates to zero.
“Monetary relaxation; it involves the purchase of a predetermined amount of government bonds or other financial assets to add money directly to the economy. ”
However, increased QE levels can result in currency devaluation. Famous American economist Peter Schiff said that money, which has been printed in unprecedented amounts recently, can cause hyperinflation.
Monetary tightening works on the contrary. It decreases the liquidity injected into the market over time by reducing the current daily supply. As the basic economic principles dictate; If the demand remains the same or increases, while the supply drops, the value of the asset should theoretically increase.
At this point, Bitcoin comes into play.
Monetary Tightening and Upcoming Halfway of Bitcoin
The total supply of Bitcoin is limited to 21 million. Also, because they add new blocks to the miners’ network every 4 years, their rewards are reduced by half, thereby halving the supply and inflation rates of newly released bitcoins to the market.
Inflation is now at about 3.64%, but in less than 2 weeks – after the third half ahead – this rate will drop to 1.8%.
Kelly also noted that the price of Bitcoin really increased after the previous two halves. This has led to many speculations that history will recur in the cryptocurrency community.
Of course, the general economic environment this year is different from that in 2016 and 2012. The spread of the new coronavirus (COVID-19) slows down the macro economies of countries due to constraints because all industries have stopped working.
Does Mainstream Media Have Negative Effects on Crypto Money?
The Bitcoin and cryptocurrency market was brought up by various giant traditional media organizations during the parabolic price increase in 2017/2018. Kelly made bold claims several times in the past and said he would continue to buy Bitcoin even for $ 20,000. In the following months, BTC lost 85% of its all-time high.
Another example was Ripple’s XRP. “XRP is one of the newest cryptocurrencies at the time, and it is around $ 2 per token.” Serious claims were made.
Such news can force retail traders to buy right away, which can further speed up prices. The XRP guide was released on January 2, 2018, and just a few days later, the asset reached the “All-Time High”. But it followed a rapid and painful collapse that followed. A month later, XRP fell 82% to $ 0.57 and saw $ 0.23 in August.
In any case, mass media draw attention to the cryptocurrency market, but the debate continues whether this is the attention the cryptocurrency market needs. Just a few months ago, in February, Bitcoin was once again on CNBC’s agenda, and then saw a major liquidation that lowered the price to $ 3,600.