TL; DR
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There is a theory that the more interest BTC receives after the halving, the more scrutiny it will face, which could ultimately be a net negative for Bitcoin (and therefore the industry as a whole).
Full story
Right now everyone is talking about BTC halving – and they should be. This halving is probably the biggest event in BTC’s history after its creation.
But we just read a story that caught our attention.
The premise: The more interest BTC receives after the halving, the more scrutiny it will face, which could ultimately be a net negative for Bitcoin (and therefore the sector as a whole).
So the theory goes that because the amount of new supply introduced to the market will be halved (after the halving event), this will result in ‘cryptomania’.
The difference this time compared to a possible halving before is that we now have BTC ETFs in the US.
Crypto mania is good when things are going well, but historically we have seen that when things go up fast, they usually go down just as fast (or faster!).
The job of regulators is to preserve things under control, not to let the value of BTC move too quickly in either direction.
If this bull run turns into a full-blown crypto mania (as in previous bull runs), regulators may be forced to rethink regulations to regain market stability and protect investors.
Other areas may also need to be reconsidered. For example, BTC uses proof-of-work, which requires a lot of resources to produce enough energy to validate transactions. Regulations regarding sustainability can therefore also be on the table.
The good news is that these are all just theories and ideas for now.
And if there’s one thing we know about the crypto markets, it’s that what we expect and what actually happens don’t always align.
Have fun halving!! 🌗