Bitcoin fair valuation at the next halving in 2024
Bitcoin volatility may decline after halving
Traders expect bitcoin volatility to decrease after halving.
MTC experienced a sharp surge in volatility over the weekend.
Halving was unable to determine the growth of the currency above $ 10,000.
Bitcoin traders expect that now, after halving in the BTC network, the volatility of the world’s first cryptocurrency will decrease.
Implied volatility, or as it is often called, implied volatility, is considered an indicator that reflects market expectations of future realized volatility. Accordingly, this indicator allows you to assess the future movements of asset prices. The most popular markets for tracking implicit volatility values are futures and options..
If you look at these expectations for Bitcoin (BTC), you can see that the markets expect a significant decrease in the volatility of this cryptocurrency after the long-awaited halving Bitcoin halving halving the number of new coins created and earned by miners in half. It happens about every four years and … More finally took place.
Implied volatility fell
So, the third halving in the MTC network happened. Now, BTC’s annual inflation rate has dropped from 3.65% to 1.8% and is lower than all other fiat currencies, as crypto enthusiast and analyst Mati Greenspan recently wrote. For comparison, the annual growth rate of global inflation was 3.41% in 2019.
Of course, in the long term, this should be another advantage of bitcoin. Unsurprisingly, on the eve of the halving, traditional institutional investors also started thinking about investing in bitcoin. Just a few days ago, a billionaire and a successful trader Paul Tudor Jones further fueled investor interest in buying bitcoin, calling it the gold of the current generation.
However, the halving took place, and now, according to the analytical portal skew (@skewdotcom), in the short term, traders expect the volatility of bitcoin to decrease. As the above chart shows, after the halving, the implied volatility dropped sharply.
However, not everything is so gloomy. In fact, the spike in implicit volatility occurred only recently, but now the indicators have simply returned to the levels observed on May 10..
Meanwhile, as we covered in April, Bitcoin’s realized volatility has also returned to “normal” levels after the record swings in March. Judging by the market expectations, reflected in the dynamics of the implicit volatility, the price may calm down even more in May.
Halving turned out to be included in the prices?
Indeed, at the time of writing, there has been no stellar growth in cryptocurrency. Bitcoin continued to struggle unsuccessfully with the $ 9000 mark, recovering from the crash that hit the currency over the weekend. Perhaps this event really turned out to be completely embedded in prices and there is nothing more to wait?
However, enthusiasts remind that, according to history, all the most interesting began after the halving. In this regard, they urge to be patient and wait for further developments. Some predict an update of historical highs for bitcoin this fall, others are betting on next summer.
Well, too high expectations regarding the very moment of halving have already served bitcoin a disservice, causing the massive liquidation of positions on crypto-exchanges and putting pressure on its price. It remains to hope that this will not happen with high hopes for a bright future for bitcoin..
Do you believe that the positive effects of halving will still affect the value of bitcoin? Share your opinion in the comments!
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