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When it comes to cryptocurrency, speculation is the centre of most operations. The existence of the cryptocurrency market relies on price speculations, as this is what motivates traders to make moves. While not so many people understand cryptocurrency, it is not easy to tell what the future holds for it. 

It is essential to note that cryptos have not been there during any pandemic before, so it may not be easy to know whether or not the current turmoil will impact its price.

Observational data has, however, shown that there has been a correlation in the bitcoin price and the performance of regular markets.  

As much as the pandemic has gotten in the way of most things, especially in the financial markets, there is still something to look forward to. The following are some crypto events that are going to shape its prices.

1. Halving

Bitcoin halving, which refers to the reduction of mined blocks, has already taken place in May. As for the question of its impact on crypto price action, here is what you need to know.

Judging from other bitcoin halving events that have taken place before, the witnessed price action is quite significant. For instance, in the 2012 event, the price went up to $100 from $10. 

Note that halving creates a scarcity in the market. The number of bitcoins available in circulation is lower than the demand. The increase in demand causes a considerable increase in price. Some traders may have ideas contrary to this.

Also, there are speculations that the halving might discourage miners, causing a fall in their numbers. While there is all that speculation, volatility might result, driving the prices in a given or unsure direction. 

The idea behind halving is controlling the saturation of the bitcoin in the crypto market. This will create a scarcity that will make the cryptocurrency more valuable. 

2. Consolidation of the markets

As more attention has been given to the crypto market, the number of cryptocurrencies have continued to increase steadily. This has continued to happen even when the price of the bitcoin continues to fall. 

The exciting part about the crypto market in 2020 is that its capital is still flatlined despite the increase in the number of coins in the market. This is an indicator that saturation has taken place, and the growth of the number of cryptocurrencies should not be expected much this year. 

There is still some good news, though, as the crypto market continues to get attention from mainstream finance, there will be an increase in capital. This, however, does not mean that it will trickle down to the other coins. 

3. Cryptocurrency going mainstream 

As mentioned earlier, not so many people understand the crypto market so far. However, this has not stopped the introduction of new cryptocurrencies in the market. Libra has been the talk of crypto market streets.

There is also stablecoin, which is meant to address the many uncertainties that surround cryptocurrencies. This coin is said to have backing from popular agencies such as uber, Vodafone, and Coinbase. 

Currencies like Libra are projected to have a user baser exceeding 170 million in the U.S alone. Eventually, people may have to make uber payments using cryptocurrency.

Social media users like the ones on Facebook will also start using coins. Once crypto goes mainstream, then there will be some price action.

Prices are expected to increase as cryptocurrencies go mainstream. 

4. Coronavirus stimulus packages to improve the cryptomarket

Coronavirus pandemic has caused turmoil in many areas of life. The finance market, travel, and health industry have been the most hard hit. Luckily, many governments have set aside stimulus packages to cushion the various sectors from the pandemic's impact.

The cryptocurrency market is set to benefit from the package. The impact will, however, be felt gradually. At the moment, investors are shying away from traditional financial markets and looking the other way. 

The availability of the stimulus package will motivate the purchase of bitcoin. It is, however, essential to note that the changes will be very gradual, and the growth impact might end up being felt in 2021.

Note at the moment; many people still prefer to hold on to their money and save it. The good news is that there is still some activity as cryptocurrency traders are still seeing some retailers buying. 

Bottom Line

Despite the headwinds being experienced by the crypto market, the question as to whether the market will go down or bloom has a relative answer. While some may see the current situation being a challenge, others will see an opportunity.

As for the different cryptocurrencies available, this is the time when they are supposed to prove their worth. There will be volatility and significant price swings, and this is not the time to try to get rich fast. 

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