Bitcoin market dynamics see changes after halving
It has been a month since the Bitcoin Network (BTC) miners‘ reward went through the 2020 hallway, and much has happened to the prevailing cryptomint since then. From the changes in investor and trader behavior to the exponential growth of institutional interest, the halving seems to have marked the beginning of a new reality for all Bitcoin Formula market participants.
Although halving didn’t come with the immediate price increase that many had associated with the event, there are some key factors that indicate the beginning of some changes that may be here to stay, some of which may even be fundamental to the future of Bitcoin as an asset class.
In fact, some believe that 2020 has all the makings of a great year for Bitcoin in terms of price and visibility. A recent Bloomberg report even expects Bitcoin to surpass its 2017 record prices to reach $28,000. Recently, Simon Dedic, co-founder of the cryptanalysis company Blockfyre, even went so far as to say that $150,000 could be a target in the event of a bullish move.
Although the beginning of 2020 showed declining volumes for Bitcoin’s regulated derivatives on the Chicago Mercantile Exchange, this trend seems to have been completely reversed after the halving, which occurred shortly after veteran hedge fund manager Paul Tudor Jones showed his appreciation for Bitcoin and revealed a stake in the digital asset, stating: „The best strategy to maximize profits is to have the fastest horse. If I’m forced to make predictions, my bet is that it will be Bitcoin.
Skew’s data reveals that Bitcoin derivatives in the WEC began to register record numbers shortly after halving. This trend continued throughout May. According to the May CryptoCompare review, Bitcoin derivatives volumes on CME’s soared 59% to $7.2 billion. The document says:
„Total GCE option volumes reached a monthly high of 5986 contracts traded in May. This figure represents 16 times the April volumes. WEC futures volumes have also recovered since April, increasing by 36% (number of contracts) to reach 166,000 in May.
Following news of 3iQ’s Toronto Stock Exchange-traded Bitcoin fund about a month before the halving, Grayscale revealed that its cryptomoney funds contributed more than $500 million in the first quarter of 2020, indicating that institutional interest continues to make headlines.
On June 10, the London-based ETC Group announced the listing of the first cryptomoney product to be traded on Germany’s Xetra digital stock exchange, and a recent survey published by Fidelity found that more than a third of institutional investors worldwide are interested in digital assets such as Bitcoin, and 80% of all investors surveyed find this asset class attractive to some extent. Cointelegraph asked Jonathan Hobbs, the chief operating officer of the digital asset hedge fund Ecstatus Capital, his opinion on the rationale for the recent institutional interest in BTC. Hobbs testified:
„The Federal Reserve’s bond purchase program has increased its balance sheet by about $6 trillion since the 2008 financial crisis, and about half of that comes from its fourth round of Quantitative Expansion earlier this year. As a result, more investors are seeing Bitcoin as a possible hedge against inflation. Bitcoin’s halving has certainly played a role in this narrative. Institutions are also seeing Bitcoin as an uncorrelated asset with a good risk of reward.
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