What Happened to Bitcoin on the One-Year Anniversary of the Halving?

The most recent Bitcoin halving took place one year ago today, on May 11, 2020 (UTC time). In honor of this event, let’s take a look back at what happened in the Bitcoin market over the past year and look ahead to what the future might hold.

During the global liquidity crisis in early March 2020, record-breaking losses across all asset classes were followed by unprecedented monetary and fiscal stimulus. At the time, Bitcoin was trading around $8,000 at the time of the halving on May 11, 2020. Investors around the world are beginning to realize that they need to seek refuge and insulate themselves from a dramatic monetary expansion. In stark contrast to this, Bitcoin has undergone a quantitative tightening -- that is, the supply issuance of new Bitcoins is cut by 50% regardless of any policymaker's choices.

BlockFi cuts interest rates on major cryptocurrencies like Solana, Avalanche and Polygon in half: On May 27, crypto lending platform BlockFi has halved interest rates on some market cryptocurrencies held by non-U.S. customers. From June 1, the interest rate on Solana deposits will be reduced from 10% to 5%, while that of Avalanche (AVAX) and Polygon (MATIC) will be reduced from 10% to 5% and 11% to 5%, respectively. (The Block)[2022/5/28 3:46:41]

Since the 2020 halving event, investor sentiment surrounding the imminent record monetary expansion has proven correct. The Federal Reserve (and other major global central banks) continue to inject liquidity into the financial system to keep lending conditions loose, and this has also played a major role in the adoption of Bitcoin as an alternative monetary asset that exists outside the system.

2020 halving market | OKEx halving index fell by 4.12%: According to the latest data from OKEx, the OKEx halving market index today is 1305.39, down -4.12% in the past 24 hours; among the 11 halving concept coins tracked, the number of gains is 0 , the number of declines was 11, of which the best performing currency was BTC, down -3.70%, and the worst performing currency was BSV, down -11.93%.

Note: The OKEx Halving Index is an index compiled by OKEx Research using the "Pass Index" to reflect the concept of halving in 2020. The higher the OKEx halving index, the better the halving concept currency market. [2020/2/26]

At the time of writing, Bitcoin has rallied 533% since the halving, as a surge in demand coupled with an inelastic (and 50% reduction in supply) supply-demand dynamics caused the asset to soar past the $1 trillion market cap .

Voice | Jianing Yu from Huobi University: The reasons why BTC broke through 10,000 again include halving and risk aversion: Recently, President Yu Jianing of Huobi University was interviewed by Times Finance. When talking about the reasons why Bitcoin broke 10,000, he said:

First, the progress and breakthroughs in blockchain technology are relatively smooth. Bitcoin is a general equivalent in digital assets, similar to blue chips in the market, and the increase in demand will lead to the price of Bitcoin, which is a very important indicator.

Second, the mining halving market is a deterministic factor. Because a lot of selling in the current market is actually formed by the selling of newly mined bitcoins in the market. After the halving, the number of coins mined by miners per day has decreased, and the amount that can be sold has decreased, which means that the short side of the market sell-off has decreased, and the relationship between supply and demand has changed. This is the logic of market supply and demand.

The third is the impact of risk aversion factors. In the short term, everyone’s risk aversion to the epidemic will soon pass, but in the long run, the international situation is becoming more and more complicated, and various systemic risks and non-systematic risks The risks are all increasing, and the global society as a whole is entering a period of higher risks. [2020/2/25]

Before the halving event, legendary Wall Street manager Paul Tudor Jones published a report entitled "The Great Monetary Inflation", in which he outlined his beliefs about the current monetary system and its future development path, and why He believes that Bitcoin is "the fastest horse".

Shortly thereafter, at a watershed moment in Bitcoin's rise, MicroStrategy, under the leadership of now-famous Bitcoin proponent Michael Saylor, announced Bitcoin as a reserve asset for its vaults.

In the later more and more accepted views, Saylor and the company decided not to use the CPI as the accurate standard for measuring inflation, but decided to use the M2 monetary base to measure the inflation rate.

Ahead of last year's halving, the Bitcoin community and others in the wider financial system were debating whether the halving would be priced in because the event would be well known in the future. While I won't go into depth about my personal views on this debate, due to the nuances of bitcoin prices and all the exogenous variables and factors, the price of bitcoin seems to be following a March 2019 report by an anonymous twitter account The S2F model proposed by Plan B for the first time is extremely interesting.

Will the same be true for future halvings? Who knows? But what is known is that since the 2024 halving is only 156,872 blocks away, it might be a good idea to get ready before the next halving…

Remember, if you are not long Bitcoin, you are short. Finally, happy halving anniversary!

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