Before the coronavirus hit, bitcoiners were looking forward to next month’s “halving” – a once-every-four-years reduction in new supplies of the cryptocurrency – as the primary factor that would drive prices higher, potentially even a 13-fold increase from current levels.
Since the coronavirus pandemic hit, however, the market’s focus has shifted instead to the trillions of dollars of emergency aid and money injections pledged by the world’s governments and central banks. Those are seen as enhancing bitcoin’s appeal as a hedge against inflation, similar to the traditional arguments for buying gold.
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However, with bitcoin (BTC) prices stagnating over the past week in a range between $6,600 and $7,200, well below the level predicted in many investors’ halving-predicated models, some industry analysts have been wondering when, or even if, prices will take off. An even knottier quandary for bitcoin bulls looms if prices begin to tumble anew.
“I don’t want to say that this is going to be bitcoin’s last stand, but it really is going to put the dominant investment narratives to the test,” said Joshua Frank, CEO of TheTIE, a provider of data on digital assets.
An analysis published Wednesday by TheTIE and trading platform eToro showed that mentions of “coronavirus” are now appearing far more than “halving” or “halvening” in cryptocurrency-focused publications:
A related finding was that, since the beginning of March, “gold” is increasingly mentioned in headlines atop stories about bitcoin:
Early writings by Satoshi Nakamoto, the pseudonymous creator of bitcoin, show that while the…