It’s been a solid two weeks since bitcoin underwent its third-ever halving.
So, what’s the news? Does it look like BTC is going to go on a bull run, will it stay where it’s at (more or less) or will fear of a crash be a self-fulfilling prophecy? This video below courtesy of SBR explains the BTC halving and how it may change the market.
As I’m sitting here writing this, watching the tickers for dozens of cryptocurrencies, bitcoin just ticked back up to $9,150, up over 4 percent over the last 24 hours. In fact, just about every crypto is up at least 1%, most sitting at around 3 percent, Orchid (OXT) taking the cake, at +5.76.
OX is the only one with a major market cap that down almost the exact inverse of the rest, at -3.27 today. Still, the total market is up a total of 3.83%.
Does this mean we’ll see a marketwide run?
Well, not necessarily. For the most part, altcoins follow Bitcoin’s lead. If you look at each index chart, most of them look like a poorly done tracing of BTC’s index. Most of the difference is just reaction time, so the peaks and troughs on the altcoins, sometimes look a little smoother. That said, the point is that when people are buying bitcoin, people also purchase altcoins. When people start to sell off their BTC, people also sell off their altcoins. So, you end up with price index charts that look like a cheap copy of the bitcoin index.
So, if BTC goes on a run, the vast majority of altcoins are likely to as well. However, this hasn’t happened yet. We saw a series dip in price just hours before the halving. Then within a day or so … it looked like BTC was going to hit 10k again. But instead, it took a dip down under 9k. But this isn’t necessarily a bad thing.
Many were predicting that the almost immediate lack of hashing power and minors selling off their shares to get out once the rewards per block were cut from 12.5 to 6.25 would lead to a plummet. Well, we haven’t seen that yet either. So, the fact that bitcoin is sitting – it should be noted that just minutes into writing this, BTC is now at $9160.18– in the low nine-thousands, I don’t think we are going to see a massive plummet. Despite fewer miners and increased transaction fees.
Transactions Fees on the Rise
Without the extra hashing power, if you want to move to the front of the line, you’re going to have to pay to play. Transaction fees are at phenomenal highs. In April, the average transaction fee was just over 60 cents. Currently, they are over three dollars. So, middle of May verse end of April we saw a 300 percent hike. But the overall 2020 transaction fee increase was 2000 percent. Around May 19-24th we saw fees reach as high as $6.54. This was a bit scary … but we are back down to the average being $3.06, a 50 percent decrease since Monday.
It’s interesting because while we have fewer overall transactions … the mempool is backed up. Very interesting indeed … remember when we were talking about hashing power above? According to bitinfocharts, over the last couple of weeks, there’s been a 37.9% reduction in transactions.
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