Experts agree: Bitcoin Halving not priced in, Ethereum supply shock?

  • The Bitcoin Halving will cause a supply shock that will drive the price into a new upward trend, according to the CEO of Three Arrows Capital.
  • The proposal to burn Ethereum (ETH) with every transaction processed has the potential to trigger an upswing for ETH.
  • Binance CEO Changpeng Zhao predicts a rally for Bitcoin due to helicopter money from governments around the world.

Su Zhu, the CEO of Three Arrows Capital, spoke in an interview for the news portal TheBlock about the imminent Halving of Bitcoin. This will take place in mid-May and will halve the mining reward, from 12.5 BTC to 6.25 BTC. According to Zhu, the Halving will exert considerable supply shock on Bitcoin, which many are currently still underestimating. Furthermore, he continued to say that the Halving is no longer priced since the crash in mid-March:

I think at this point it’s not priced in. I think it was arguably priced in a few months ago from the point of view of the leverage, but then the spot buying not coming in. I think once the halving comes through and people see there’s less supply coming on the market, there’s going to be quite a big supply shock…

I think ultimately people will be surprised by how little supply there can be if we go into a run, and then new money comes buying in as well.

Zhu said that a supply shock could also occur to Ethereum. The new EIP-1559 proposes to change Ethereum’s fee mechanism and intends to burn ETH every time a transaction is processed. According to him it is very likely that the proposal is approved. In addition, Ethereum is experiencing growing interest in Asia. Based on both factors, Zhu believes that Ethereum is currently significantly undervalued:

I can say in the high net worth space that we see in Asia, there’s serious interest in Ether because I think it’s actually easier to understand for people in that space. They say Bitcoin is digital gold, I’ll buy some of that. But with Ether, do I own a piece of what powers a global settlement layer? It’s almost like owning digital commercial real estate. This is a somewhat scarce commercial real estate and you get paid some kind of yield on it from fees or staking or whatever it is to partake in the network.

Infinite money policy will drive Bitcoin price

The CEO of Three Arrows Capital is by no means the only one with an optimistic outlook for Bitcoin. Binance CEO Changpeng Zhao spoke at the Blockdown conference about the main reason that he believes will determine the price of Bitcoin: the central banks’ “infinite money” policy. As became known recently, the US government is expected to hand out an amount of USD 2,000 directly to its citizens. About this initiative, Zhao said:

So the minute that the Feds print money, the Bitcoin price should go up because people should be using that money to buy crypto. But no one has gotten that money yet, and they’re still trying to figure out how to distribute their money.

The statements of Mark Cuban, Mike Novogratz and Arthur Hayes also go in this direction. Cuban said in an interview for Anthony Pompliano’s podcast that Bitcoin will be the biggest winner of the FEDs policy:

It’s Bitcoin’s potential benefit if everything goes into the shitter because we’re printing so much money, and there’s global implications, Bitcoin has something to deal with and something to say.

Novogratz, for its part, has declared 2020 to be the “Year of Bitcoin”. The investor said that the conditions for a price rally of Bitcoin before the end of the year had been met. Novogratz hopes that the cryptocurrency will reach its all-time high. If not, Novogratz will liquidate its BTC. Finally, Arthur Hayes, CEO of BitMEX, predicted that a new crash of the BTC price could occur before it rises to $20,000. Hayes made this last optimistic prediction for Bitcoin because of the inefficiency that financial institutions, politicians and governments will have in solving the economic crisis with their traditional methods.

However, it remains to be seen how Bitcoin will perform in the coming months. At the time of publication, BTC has shown a slight recovery in its price with a gain of 2.03% in the last 24 hours.

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About Author


Reynaldo Marquez has closely followed the growth of Bitcoin and blockchain technology since 2016. He has since worked as a columnist on crypto coins covering advances, falls and rises in the market, bifurcations and developments. He believes that crypto coins and blockchain technology will have a great positive impact on people's lives.

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