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Binance and the Bitcoin halving: certainties and predictions
Binance and the Bitcoin halving: certainties and predictions
Bitcoin

Binance and the Bitcoin halving: certainties and predictions

By Eleonora Spagnolo - 12 May 2020

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According to the CEO of Binance, the halving of Bitcoin will be something very positive for the crypto industry. These are the words of Changpeng CZ Zhao, reported yesterday in an interview published by Bloomberg, re-posted today on his Twitter profile.

CZ took the opportunity to comment on Bitcoin’s third halving, which took place last night and to explain what could happen now that the miner’s reward has halved. According to him, the miners could be induced to hold their Bitcoins and not sell them until they at least match the cost of production with the cost of sale. As for the price of Bitcoin, CZ says:

“There’s a psychological effect, which also pushes the price up, but fundamentally I believe supply is limited, but demand is increasing exponentially”.

On his Twitter channel, where normally the CEO of Binance is very active, he explained the meaning of Bitcoin halving: 0.5BTC = 1BTC

But his point of view is clearer with another tweet: 

“With less new bitcoin supply coming to market, I feel richer already”.

It is worth mentioning that Changpeng Zhao is considered one of the richest men in the crypto industry, with $2.5 billion. 

Bitcoin’s post-halving scenarios according to Binance

A few days before the halving, on the Binance blog, a series of scenarios had been outlined which could take place after the halving of the Bitcoin miners’ rewards. The explanation is that it is not possible to say what will happen with certainty and that all the predictions so far are based on what happened during the previous halvings.

Anyway, these are the possible developments that could follow yesterday’s halving:

  • The worst-case scenario: the mining death spiral. This is the most unrealistic case that would lead to the “bitcoin death”, due to a drastic drop in the price of BTC that leads miners to sell their Bitcoins, creating a scenario of full speculation. 
  • The painful scenario: the slowdown. In this case, the Bitcoin price would fall and this would jeopardize the public interest in BTC and the consequent mass adoption. Miners would be driven to mine more slowly. 
  • The realistic scenario: the Honey Badger Doesn’t Care. The third scenario seems the most realistic and the closest to the two previous halving scenarios: everything will continue as if nothing happened. There may be price drops, sales pressure and speculation, but price and hashrate will adjust over time to the Bitcoin architecture. 
  • The winning scenario: the bull season. This would be the hope of all those interested in Bitcoin, which sees an increase in interest in BTC, with pressure to get new money that leads to peaks never seen in price and hashrate. 

Post halving certainties

Binance’s certainty is that regardless of what will happen, Bitcoin is here to stay, all the more so at this time when the Covid 19 pandemic has revolutionized the world economy. Binance says there’s a need for a currency that resists censorship, without controls, without borders and that is set not to devalue itself.

The other certainty is all in Bitcoin’s algorithm: it will decrease Bitcoin’s supply and this could lead to a future where demand will be higher than the supply.

 

Eleonora Spagnolo
Eleonora Spagnolo

Journalist passionate about the web and the digital world. She graduated with honours in Multimedia Publishing at the University La Sapienza in Rome and completed a master's degree in Web and Social Media Marketing.

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