Before the start of 2020, the ratings of the most anticipated blockchain events were dominated by halving and the launch of cryptocurrencies developed by Facebook and Telegram. And although now the coronavirus pandemic is on the lead, TON, Libra and halving should be monitored and their forecasts made. How is the situation developing?
A coronavirus COVID-19 pandemic can interfere with the Olympics and the Champions League, but not with Bitcoin halving. At block number 180000, approximately May 18, 2020, the reward for miners will drop from 12.5 BTC per block to 6.5 BTC.
This will be the third halving in the history of the first cryptocurrency. In the past two times, it was followed by a powerful increase in price. What will happen this time?
To answer this question, it is worth remembering what this term generally means and why the mysterious Satoshi Nakamoto included it in the algorithm.
Miners confirm transactions, and for their work they receive two types of rewards: block reward and transaction fees. At the current exchange rate, block reward is $80000. The miners sell the bitcoins on the stock exchange or “hodle” them.
About once every four years, the block reward automatically halves. This is a kind of mechanism of slowing inflation. When the total number of Bitcoins issued reaches 21 million, the mining process will end.
Why should the price rise after this event? The most popular theory is this: miners supply less BTC to the market, but demand remains the same. Therefore, the equilibrium price increases.
Some crypto enthusiasts hope that after May 18, 2020, the Bitcoin price will skyrocket, as it was in 2016. However, much has changed since those times.
But even if a Bitcoin price burst does not follow, this does not mean that the BTC exchange rate will not increase. However, it is likely that growth will begin even before the halving, so that at the time of the event itself its effect will already be “taken into account” in price.
Immediately after the halving, many small miners will start to leave the market, because mining will become unprofitable for them with a new block reward. This can create anxiety in the cryptocurrency market and lead to a short-term drop in bitcoin prices.
However, by the end of summer 2020, when the situation around the coronavirus COVID-19 starts to bounce back, optimism will return to the cryptocurrency market, and liquidity will return with it. And then we’ll see a significant increase in the price of bitcoin. Some analysts forecast more than 20-30% price increase.
Remember how it all began in June 2019? The message that Facebook will have its own token made a real sensation. The intentions were the most serious: such giants as PayPal, Visa, MasterCard and Stripe joined the project. Many have already predicted that Libra will sweep Bitcoin off the road and become the main cryptocurrency of the future.
Unfortunately, the word “cryptocurrency” scared the US Congress. Regulators in the USA could not allow such a thing as a coin independent of central banks, which has 2.5 billion potential users. Proceedings began, and key partners neatly left the project. It would seem that a banal scam is about to begin.
However, Libra is too early to write off. The project works - it just transformed and lost some of its “cryptocurrency properties”. The essence remains the same: payment for goods and services inside Facebook products (including Messenger and WhatsApp) according to the Chinese model of WeChat Pay. But the Libra token will no longer play a central role in this system.
The main payment methods in Libra will be digital versions of the dollar and the euro. It is possible that Libra will eventually turn into a crypto payment system, where merchants will be able to accept payments in digital currencies and exchange them for fiat, as some platforms already do.
The token is still planned to be launched; but it’s not known when this will happen. Yes, and the very concept of cryptocurrency Libra has changed. Now it is stable coin, backed by a basket of fiat currencies.
Finally, the release of the Calibra wallet, which was supposed to be the flagship product of the project, is delayed until at least October 2020. Moreover, this date was announced even before the start of the coronavirus pandemic in the United States.
What to expect from Libra in 2020? It is possible that Facebook will launch a tool to pay for goods and services within applications. Universal quarantine is a great time to test such a product. Users spend more time at home on social networks and are forced to make all purchases over the Internet.
But we will most likely not see the Calibra token and cryptocurrency wallet this year. Facebook will simply not be up to them.
The Telegram token was even less fortunate than Libra. The problems began just before the launch in October 2019: a few days before the release of the TON network, the U.S. Securities Commission filed a lawsuit against Telegram for allegedly illegal sale of tokens to American citizens.
Pavel Durov offered investors a choice: get 77% of their investments back or wait until the end. Investors decided to stay in the project, believing that everything would work out. The new launch date was April 30, 2020.
Unfortunately, the court sided with the SEC. On March 24, a preliminary decision was made that the GRAM token is really a security, and selling it in the US was illegal. Although the decision is not yet final and Telegram is going to appeal, Durov has little chance of winning the case.
How will Telegram, or more correctly TON Network, act in this situation?
The first option is to return the money to American investors. They brought about a quarter of all funds raised through the ICO into the project, that is, more than $400 million. Moreover, the project will need to exclude the possibility of GRAM falling into the hands of US citizens and residents in the future. To do this, other investors, present and future, will have to commit themselves not to sell their tokens to users from the United States.
The second option is to urgently register GRAM as a security. In fact, this would mean entering an IPO, with all the associated costs and difficulties. To do this, they will need to postpone the launch of TON again, perhaps for many months.
Most likely, Telegram will go the first way. Of course, this is associated with a big risk: when American participants get their money back, investors from other countries may also want to leave the project. The amount of funds available to TON will plummet.
However, if in October 2019 the network was almost ready for launch, then the available funds may well be enough. At least the chances of seeing the GRAM token in 2020 are much higher than the Libra token release.
To summarize: our forecast for the growth of the BTC price after halving is moderately positive up to 30%. There is much less confidence that the TON network will see the light of day. As for Libra, the payment instrument itself can be released at the end of the year, but without a token.
|Exchange||Volume change, 24h|