Cryptocurrency space is enjoying the recent surge of prices and hoping that the impending bull run would arrive earlier than many have predicted. April 2nd marked the first significant instance of price surge in 2019, where Bitcoin and most of the altcoins made double-digit gains breaking key resistance level almost after a year.
The biggest gain for the market was not the upward movement, but the fact that the market was able to bank on it and solidify those gains. Since the beginning of 2019, the crypto markets has been pushing for some upward rally, but whatever small gains that the market made, was almost immediately neutralized.
However, the recent price rally has got everyone surprised, and no one is able to zero upon the exact cause for the sudden surge. There are various speculations for the cause of the market movement but nothing certain has come out.
The speculations mill have many theories causing the recent price rally, ranging from an anonymous whale pumping the market with a significant amount of BTC, which triggered the trade bots to execute several small trades amounting to hundreds of thousands of dollars.
Another theory suggests the price surge was caused by an April fool post claiming that SEC has approved Bitcoin ETF in an emergency meeting overnight. Apart from these one theory suggest that since there are many block rewards halvening and major hard forks scheduled for the latter half of the year, the crypto trade market is bullish about the token prices.
So, does Block Reward Halvening and Hard-Forks really responsible for changing the market sentiments and turning it bullish. We will look at various aspects and try to understand how these events are able to impact the market trends.
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Block Rewards Halvening Have Known To Generate Bullish Trends
Cryptocurrencies work on the distributed ledger technology, where there is no central database and the peers of the network are responsible for verifying the transaction, and the process of verifying the transactions is called mining, and those peers earn block reward for their input to the network.
The Block rewards are fixed for every cryptocurrency network which makes use of Proof of Work, and these block rewards get halved after a certain period of time, depending upon the number of tokens in circulation and the number of tokens left to be mined.
The block reward halvening is known to create a bullish nature towards the coin since the community and especially the mining community knows even if the mining rewards are halved, an increase in the token value would compensate for the lesser amount. So, it makes more sense for miners to proceed with their mining operations and keep the network decentralized.
Litecoin, one of the biggest gainer during the recent rally and the biggest gainer in the year is set for a block reward halvening later this year.
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Does Hard Fork Help in Bringing The Bulls To the Market?
Hard-forks have become a trend lately of a sort and many altcoins have gone down that path in recent times. Hard-Forks were intended for bringing in a significant change to the network consensus if it is not possible to implement on the main network. Earlier hard forks were associated with bullish sentiments, as the existing users of the network had the opportunity to double up their coins if they own the token before the hard-fork.
However, the recent hard-forks haven’t generated the same amount of bullish sentiments in the market as it used to do 2 or 3 years ago. The reason being there are thousands of altcoins on the market and hard forking these days are devaluing the original as well as the forked coin.
Plus, forked coins are not cryptocurrencies in the true sense, since they have been created out of thin air, and their valuation is bright from the original coin.
Block Reward halvening still might be responsible for driving the bullish sentiments in the market but not to the level of bringing the bull run. On the contrary, Hard forks were earlier a reason to rejoice, but as the trend grew, its impact on the valuation of the token does not make much of a difference and in some cases it actually creates a bearish sentiment, take BCH hard fork of November 2019, many believe the infamous hard fork was responsible for strengthening the bear markets.
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