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Jun 8, 2020

After the Halving

ILCOIN Development team

If you heard a sudden collective yawn surround you as the Bitcoin halving event passes us by, don’t be surprised. For months now, exchanges and cryptocurrency news have been reporting our ears off as the cryptocurrency ‘Christmas’ came ‘round the bend. You would be forgiven if you gave off a big “so what” as the anti-climactic event rolled over without so much as a push worth of effort.

Some saw this coming. Others put all they had into it. But one thing is for sure, as far as a ‘big’ event, the day itself was not something to phone home about. It’s not like things dropped off heavily. A lot of excitement titillated the markets beforehand, but it was trading as usual as the twelfth of May went by. But don’t be fooled and don’t sell off too quickly. This is part of a pattern that has yet to develop.

Coin values were shaping up just before the big halving event with Bitcoin reaching ten thousand dollars for the first time since February. It seemed like an exceptional start to begin with and people were ready to jump at the opportunity. Sadly, not long after it has started, it all sank down to eight thousand once more in what can only be described as a disappointment. Since then, not much has changed in terms of overall value. It’s popped a little but slower than most were expecting. Was this all that we had been waiting for? Is it not as exciting a time as we originally thought? Well, hold on now. It is never that simple, now is it?

The sudden burst of value before the halving day can come down to two main causes: saturation of the markets and internal manipulation. Beginning with the former, people have been told that this is a situation to get excited about for a long time. All those people who had no idea what Bitcoin was the first time around now saw a chance to get in and get in big. They smelled money but they didn’t have the understanding of how it all works. It is probable that because of sudden interest and frenzied buying, many got caught up in FOMO thinking that it doesn’t matter whether they buy a Bitcoin at ten or ten thousand dollars — as long as it was before the twelfth. And that kind of thinking, though misguided, is to some degree warranted if you are sure that it will soon be up at twenty thousand dollars. But the sudden burst of buyers in the market filled up the markets with bogus numbers; giving everyone else the idea that it’s all getting started. The fall back to where it once was comes naturally when the everyday trader comes back to his average trends. And remember, there are a lot of everyday traders in Bitcoin. For the average Bitcoin trader, this sudden pull back is a welcomed thing before the halving because it means that the saturation didn’t get in the way of the true technical profits that come as a result of deflating the currency.

That being said, there are those who smiled at in coming purchases and the rapid growth in value of the coin. These are the big boys of the Bitcoin industry. They are the miners who see this event not so much as an opportunity to make some profit, but rather to get rid of some of the competition. Deflation means more resources for mining. It means more electricity and fewer rewards for more work. This is an extremely unwelcomed reality for those who have invested millions, not in the coins themselves, but in warehouses and super computers to mine Bitcoin. For them, they would prefer to look long term; making sure that their profits are steady rather than explosive. The halving event was a chance to buck the competition out of business by getting the markets into sudden volatility. Those who are not seasoned veterans or don’t have the capital to sustain such volatility at such an intensely important point in Bitcoin’s life would be better off selling what they’ve got for the lost profit and moving on to the next venture. This is great for the big mining companies because the loss of profit from the halving of the reward can be compensated by less competition too.

So, what comes next? Is there no sense in staying with Bitcoin at all? That’s crazy talk. We cannot simply pretend like nothing happened and that the halving was just a gust of wind. From an investment point of view, the word of the hour is steadfast — hang in there. Similarly to the last halving event, we are likely to see a very gradual increase as the currency adjusts to the new mining rewards. After all, it has been just a couple days. Maybe in some weeks (perhaps in a month or two), we can see the results of this halving. Things are only getting started in this regard, and if you want to make money, you need to be ready.

Right now, the best advice would be to start looking at altcoins. These are cheaper and — though more volatile — hold far smaller risks because of their prices. That is, compared to the possible returns that can be made from them. Most altcoins are bound by Bitcoin because of its position as the main cryptocurrency in the market. What that means is if Bitcoin’s value rises, it is likely that all others will too. One example of this is ILCoin: a lesser-known coin that has already shown explosive signs of future value and one that is likely for a huge increase as Bitcoin makes its move post halving.

It is important to look beyond the superficial basics of a historic event like this one. It may not seem like much when it actually comes around but we need to be aware of the past as much as we are aware of the future.

Think beyond all the ads and promos. Whenever someone starts talking up an opportunity, run. Remember that in the investment game, people always keep their secrets. These are rules to live by, and the halving event is just another trail that people would rather get rich off of alone. Now’s the time to get in it and wait it out for as long as you can.

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