As central banks and governments around the world inject trillions of dollars of coronavirus-related aid and stimulus into the financial system, big investors are becoming increasingly curious about bitcoin’s (BTC) potential as a hedge against inflation.
And nowhere is that inflation resistance more evident than in bitcoin’s once-every-four-years “halving.” That’s when issuance of new units of the cryptocurrency automatically gets cut in half. The plan, expected to continue for at least another century, was coded into the underlying blockchain network’s programming when it was launched 11 years ago. The mechanism’s very purpose was to prevent a rapid debasement of bitcoin’s purchasing power.
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Bitcoin’s next halving isn’t expected until May. But two lesser cryptocurrencies, bitcoin cash and bitcoin SV, are due for their halvings this week, offering an advance glimpse of the quadrennial phenomenon.
“You’re going to get a sneak preview of what happens with bitcoin in a month,” said Greg Cipolaro, co-founder of Digital Asset Research, a New York-based analysis firm.
Bitcoin cash (BCH), a cryptocurrency that split off or “forked” from bitcoin in 2017, is expected to undergo its halving on Wednesday. Bitcoin SV (BSV), which forked from Bitcoin cash the following year, is due for a halving on Friday.
In the realm of cryptocurrencies, the two forked cryptocurrencies are considered also-rans, with a combined total market value of roughly $8 billion, versus $131 billion for bitcoin.
But since halvings constitute a crucial chapter of any crash course in cryptoeconomics, the episodes bear watching. Many crypto traders say big price…