Economic data released last week was worrying to say the least. Midweek figures revealing a drop in exports from big Asian economies, such as Japan and South Korea, hit equity markets globally, resulting in the S&P 500 and the FTSE 100 both dropping considerably.
From a crypto asset point of view, however, both Bitcoin and altcoins have performed well during this difficult period. Bitcoin has been in a consolidation phase, remaining steady in between $6,000 and $7,000.
Quarterly musings and a look ahead to Q2 for Bitcoin
So what is coming for cryptos in this new quarter? The big event, of course, is the Bitcoin halving, and the reduction in block rewards is now just over a month away. The two previous halvings saw massive upward inflections in price.
The halving of the block reward in May means that miners with less efficient equipment will fall away, leading to a drop off in the hashrate and the Bitcoin ecosystem becoming more efficient.
This initial drop in supply could put upward pressure on the price. Analysts at eToro say that the likelihood of inflation, resulting from QE measures around the world as governments and central banks fight the fallout caused by COVID-19, may also boost Bitcoin’s long-term outlook.
It’s also important to note that Bitcoin hasn’t actually dropped as far as global markets have in this first, tumultuous quarter of 2020. The crypto asset only dropped 12%, outperforming the S&P 500 and the FTSE 100 which were down 23% and 25% respectively.
Will Ethereum finally scale?
Ethereum is looking to implement sharding to solve its scalability challenge. This will split the network into smaller shards,