Bitcoin Cash Halving will occur on Wednesday at block 630,000, will BCH offer us a peek into what the future holds?
Bitcoin Cash is halving its mining rewards tomorrow for the first time while the network is seeing a drop in hashrate ahead of the event. The halving will likely lead some BCH miners to switch over to Bitcoin, but this may be a temporary deal. Besides, some industry observers estimated that BCH Halving may not affect BCH price much, but that it will affect its hashrate, as its halving is occurring before Bitcoin. There have been concerns over hashrate leaving the BCH chain and heading over to Bitcoin, but this might re-balance as BTC leads into its halving.
According to the BCH block reward halving counter, Bitcoin Cash will undergo its third halving on Wednesday this week. Just like its big brother BTC, block rewards will drop from 12.5 to 6.25 coins while inflation falls from 3.64% to 1.80%.
Bitcoin Cash will be halving on Wednesday
Meanwhile, the cryptoanalysis firm Arcane Research also argues that, as more miners start mining BTC, the mining difficulty will increase. But that the effect will be small as the hashrate devoted to BCH is limited compared to BTC. And the BTC difficulty algorithm takes two weeks to adjust.
The report stated:
“There is a real risk that the hash rate might be temporarily halved on both the BSV and BCH networks until the bitcoin halving in May unless the price of the coins or the transaction fees of the networks increases significantly relative to Bitcoin. Although the discussion of is the halving priced in is one that will never settle, it is highly unlikely that the halving will result in a doubling of the price.”
As mentioned above, the counters also report that there are currently 18.37 million BCH in circulation, which is 87.49% of the total 21 million supply. As with Bitcoin, though, an unknown percentage of these will be lost or inaccessible.
From a price perspective, Bitcoin Cash is still in the digital doldrums despite a minor recovery this week. Since its 2020 peak just below $ 500, the asset has dumped almost 50% to current levels without enjoying the revival that has been achieved with BTC.
There has been no pre-halving pump as there was with Litecoin, and it could be that BCH does not get much of a boost from this week’s event. On-chain metrics look relatively grim for the asset as miners may be switching over to Bitcoin because it’s more profitable.
Hash rate is currently down 34% since its 2020 peak and 60% since its all-time high. With a current hash rate of 3.27 EH/s, Bitcoin Cash network health is in the gutter, and things may worsen as the block reward is slashed.
So, how about Bitcoin?
The Bitcoin network is actually looking much healthier as its halving approaches. With less than 37 days to go, according to the counter, prices and on-chain metrics for BTC are improving. Before, several key metrics such as hash rates, Puell Multiples, and MVRV ratios, are now turning bullish. Additionally, Bitcoin’s hash rate has returned above 100 EH/s and has been in an uptrend since mid-March.
BTC prices also appear to have found their bottom and there is likely to be no further miner capitulation as indicated by an upturn in hash ribbons. Bitcoin has managed to hold above the $ 7,000 this week and technical prediction indicators such as the stock-to-flow model suggest that the asset is still on track for big gains after its halving next month. The same may not be applicable to Bitcoin Cash.
On April 6, Coinmetrics published data indicating that 6 million BCH has not moved since the Blockchain forked off from Bitcoin on Aug 1, 2017. With nearly 18.4 million Bitcoin Cash in circulation, 32.6% of existing coins are either lost or being held for the long-term.
What about Bitcoin Cash? Circulating supply is generally reported as 18.4M, but is it really 12.4M? Since 6M $BCH has never moved since the fork, should they be considered as circulating supply? pic.twitter.com/Udo9ODhIVP
— CoinMetrics.io (@coinmetrics) April 6, 2020
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