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The Chief Executive Officer at leading cryptocurrency exchange Binance believes the Bitcoin halving is not priced in. Whilst reluctant to give a specific price target, Changpeng Zhao is “pretty positive” the upcoming supply shock will result in higher prices.
Zhao believes that the current market is not efficient and that future events, even if they’re known in advance, are not necessarily reflected immediately by price. He also says that a reluctance to sell amongst miners will create an even greater supply/demand imbalance.
Zhao: Bitcoin Halving Not Priced In
One of the hottest debates in cryptocurrency circles at the moment is the Bitcoin halving and its potential impact on price. The halving will see the numbers of Bitcoin rewarded to miners drop from 12.5 to 6.25.
As NewsBTC has reported previously, some believe the halving is “priced in“. They reason that knowledge of the event has been public for as long as Bitcoin has existed. Satoshi Nakamoto detailed the halving schedule in the Bitcoin whitepaper. Therefore, buyers and sellers have presumably had plenty of opportunity to make their move by now.
Others believe that the market does not behave quite so efficiently. Changpeng Zhao, the CEO of Binance, is amongst them.
In a recent interview with BlockTV, Zhao gave his opinion on the halving:
“I personally believe the halving has not been priced in… Humans take a lot of time to let concepts sink in.”
https://twitter.com/BLOCKTVnews/status/1230136880714387456
After acknowledging that Bitcoin price had indeed soared following both previous halvings, Zhao said that the event would have a psychological impact on miners.
The cost of producing a single Bitcoin will double, at least in the short-term. Zhao believes miners will be very reluctant to sell at less than cost and this will likely have a positive impact on Bitcoin price.
He added that demand for Bitcoin seemed to be increasing at a time when new supply is set to suddenly drop. Basic economics suggests that this should result in Bitcoin gains.
When asked directly about his outlook for post-halving era, Zhao said:
“I’m pretty positive.”
Blockchain Already Found its Killer Application?
Elsewhere in the interview, Zhao claims that blockchain might have already found its killer application. For him, the technology has the potential to be truly world changing in terms of crowd funding.
However, he is not referring to initial coin offerings, the method by which Binance itself funded its own launch. Instead, Zhao envisages global projects outside of the scope of funding by a single national government using the technology. He gives the examples of deep space travel and significant medical research.
Related Reading: Analyst Prices Bitcoin at $400k By Next Year Based on Miner Capitulation Pattern
Featured Image from Shutterstock.
