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Bitcoin halving is considered to be a potential catalyst for an increasing Bitcoin price. However, this years halving event cannot be compared to past halvings as the market has matured more significantly according to some experts such as Binance founder Changpeng Zhao. What is certain is that the reward per block mined will be reduced from 12.5 to 6.25 Bitcoin, which means that Bitcoin miners can expect significant sales losses.

If the Bitcoin price rises, driven by the halving, then altcoins such as XRP and Litecoin could also benefit in the long term. A recently published study by Binance shows that the correlation between Bitcoin and the Altcoin market remains strong. Ether (ETH), Dash, Ripple (XRP), Bitcoin Cash (BCH), Monero (XMR) and EOS show the highest correlation with a rate between 74% and 82%.

The Ethereum price, with 82%, shows the highest correlation with Bitcoin within the last 3 months. Furthermore, Bitcoin is tradable against almost all altcoins, so that there is a further dependency, although the available trading pairs with Fiat currencies and other altcoins continue to increase. Bitcoins market capitalization is more than half of the total crypto market (64.1%), so price movements of Bitcoin have always had a significant impact on the altcoin market.

Pierce Crosby, Managing Director of Trading View, describes that Bitcoin and the altcoin market have always been strongly correlated:

Everything correlates to Bitcoin, much like in the U.S. equity market, everything correlates to the U.S. dollar. Bitcoin is the largest store of wealth for the asset class, so everything is basically pegged against its overall performance.

Van de Poppe, a full-time trader on the Amsterdam Stock Exchange, explains that Bitcoin and Ethereum, as well as all Ethereum-based cryptocurrencies, have the highest correlation with Bitcoin:

The reason is quite simple; the king of movers are Ethereum and Bitcoin and still, the majority of the ICOs are based on Ethereum. So when Ethereum moves, they usually follow. The same goes for the IEOs. If Binance Coin trends up, they usually follow.

Nevertheless, there are times when BTC and ETH show a rather lower correlation, as ThreeArrows CEO Su Zhu described in a recent tweet.

The financial economist and well-known Bitcoin critic Peter Schiff says that the halving of Bitcoin is bullish for the price, but some speculators may use the time of the upswing to realize profits and thus build up selling pressure:

As its universally regarded as being bullish, lots of speculators have already bought. This risks a huge sell the fact, as those hoping to cash in, cash out.

Ripple CTO David Schwartz replied that he disagrees completely, as it makes no sense that the bearish selling pressure is not yet priced in:

Youre saying the halvings bullish affect on supply is priced in but the bearish sell pressure after it isnt? The reverse seems much more plausible to me, and yet still pretty implausible.

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Last Updated on 15 April, 2020

Originally posted here:
Bitcoin Halving: Can Ripple (XRP), Litecoin and other altcoins benefit? - Crypto News Flash