Why BCH and BSV Halving Data Is a Poor Indicator for Bitcoin Forecasts

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Johnson Xu is the Chief Analyst at TokenInsight, a token data and rating agency.

We are moving ever closer to Bitcoin (BTC)’s third halving, while the coronavirus pandemic continues to disrupt the global economy, creating a ripple effect across the global financial market.

The forthcoming halving, coupled with weak bitcoin prices, is forcing the network to undergo an unprecedented cleanse to rebalance – and become a more efficient and healthy network.

Network hash rate reduction has traditionally been seen as a negative indicator that reflects weakness in network security. However, this is not always the case, as sometimes a healthy correction is needed – in order to reset the network and reduce wasteful mining.

The forthcoming halving event is putting SHA-256 miners under significant pressure, as it now looks as though the Bitcoin network will undergo its next major event in less than 30 days’ time.

Bitcoin cash (BCH) and bitcoin SV (BSV) underwent their own network halving events on April 8 and 10 respectively, reducing block rewards from 12.5 to 6.25.

As such, it could be worth taking a closer look at the BCH and BSV markets before and after the halving events – to see if they can shed some light on the matter of block reward halving.

Hashrate and prices

The prices of both BCH and BSV remained within a stable range, both prior to the halving and post-halving.

Both chains’ network hashrates dropped from 3-4 exahash per second (EH/s) to below 1EH/S at its lowest point. Thanks to BCH and BSV’s difficulty adjustment algorithms, the network did not experience a prolonged spike in block time.

The overall hashrates returned to a state of equilibrium and are currently hovering around 2EH/S and 1.5EH/S for BCH and BSV respectively.

The marginal cost of creation for both BCH and BSV has remained within a relatively constant range, except during the halving days themselves, where we saw an uptick in the marginal cost of…

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