In May, Bitcoin underwent its long-awaited block reward halving. The number of coins mined per block was cut in half, leading many to expect a massive surge as the market supply of BTC was technically supposed to decrease relative to demand.
And it did… kinda. Since the halving, Bitcoin has gained 70 to 80 percent against the U.S. dollar, with an increasing demand for the cryptocurrency driving up its value.
This is why analysts are keeping a close eye on the first halving for Zcash, the Bitcoin fork launched by Zooko Wilcox that is focused on user privacy. Each block reward halving or reduction has a diminishing effect on the market of a cryptocurrency, so Zcash’s first halving is expected to be one of importance.
As Qiao Wang, a prominent crypto analyst and DeFi investor recently stated:
“Also a friendly reminder for ZEC halving in a month. Unlike BTC’s 3rd halving which was completely overhyped the 1st ZEC halving probably matters.”
ZCash’s halving is just days away
ZCash’s halving is now under four days away. Once the halving activates, miners of the $700 million cryptocurrency will see their block rewards cut in half, hence “halving.”
In theory, this should result in higher prices: a 50 percent decrease in block rewards will mean that miners have 50 percent less of the cryptocurrency to sell on a daily basis. Assuming demand for ZEC holds up, the coin should increase in price over time, barring any supply shocks.
According to Ryan Watkins, an analyst at Messari, though, this may not be the case.
He recently said that on-chain data suggests there is a reason to believe that miners only comprise a small amount of the selling pressure that has dramatically crashed ZEC over the past years:
“Assuming miners sell all their ZEC as they mine it, they still have only historically made up less than 5% of ZEC daily trading volumes over the past year. The measure isn’t perfect, but its a good enough proxy to show that miners may not be what’s holding ZEC back.”
For context, the altcoin is notorious for falling without catching any bid after trading higher than Bitcoin when it launched four years ago.
Even still, many are convinced that ZEC does have a viable long-term value proposition. Pseudonymous DeFi and crypto investor “DgnTec” recently said:
“I’m changing my mind on ZEC. The need for a private SOV is even more evident in DeFi, where whales trade in the open, susceptible to frontrunners and virtue signaling observers.”
Ryan Selkis, CEO of Messari, echoed this comment in October. He said that he thinks ZEC has the potentially to be a “trojan horse” winner in this bull cycle due to a “clean opt-in / opt-out privacy pool builds momentum with regulators while fixing long-term fungibility (unlikely to get fixed in BTC)”
The post This $700m cryptocurrency is about to see its first halving six months after Bitcoin appeared first on CryptoSlate.
Source: This 0m cryptocurrency is about to see its first halving six months after Bitcoin