The first weeks of the year have been extremely moved for Bitcoin. Well, the world’s first cryptocurrency has gone through one of its biggest bullish rally in recent months. Positioning its price around $ 10,000 per BTC once again. But, this increase in the price of Bitcoin, could it have been a consequence of the media attention in the Bitcoin halving?
The rally factors
While the Bitcoin rally lasted, it was common to find among the analysts of the crypto market, the mention of three fundamental factors that drove it. However, at the moment they would be being questioned, due to the significant drop in the price of BTC after the collapse of traditional markets yesterday.
And, the first factor that was thought to drive the price of Bitcoin, was the unfortunate expansion of the coronavirus. A disease that threatens to wreak havoc on the world economy. Driving the capitals of the world, therefore, to take refuge in valuable assets such as the BTC, increasing their price.
However, the fall in the price of Bitcoin yesterday, while value reserve assets such as gold and silver increased, has led analysts to reconsider this theory. Leaving only two of the factors believed to be responsible for the rise in BTC prices.
Thus, the second factor that is believed to have driven the crypto market in recent days is the proximity of the date for which the Bitcoin Blockchain halving is expected to occur. An event that will halve the reward earned for mining the cryptocurrency. And therefore it will increase the shortage of it, and possibly its price.
Finally, the third factor would be the speculative momentum of the market itself, which led traders to increase Bitcoin demand so as not to lose profits from the bull market. Being this factor, together with the proximity of halving, those that are now considered were primarily responsible for the increase in the price of Bitcoin.
What role did the media play?
So, to try to find the causes of the increase in the price of Bitcoin, it has begun to analyze the media. And more specifically, the mentions that they made of the Bitcoin halving while the bullish rally lasted.
In this way, the company The TIE, has managed to establish a correlation between the price of Bitcoin, and the mentions made by the media of the future halving in its Blockchain. Commenting on the company’s CEO, the findings found by it when observing both data together:
«We noticed how, as halving mentions declined last fall, that tended to correlate with the downward movement of prices (…) Once that narrative was resumed, Bitcoin saw an upward price movement«.
Although it is not possible, from these data, to conclude that it was simply the mention of halving in the media, which boosted the price of Bitcoin. Undoubtedly, this is an important fact when considering the factors that led to the beginning of the bullish rally. And therefore, to understand the operation of the cryptocurrency market.
International Studies student, interested in economics and international politics. Passionate about the progress of the Fourth Industrial Revolution in general and cryptocurrencies in particular.