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Crypto data company The TIE recently posted data showing Bitcoinâs price correlates to the number of halving mentions in digital asset trade publications.
After evaluating data derived from crypto publication headlines, digital asset alternative data provider The TIE discovered a correlation between Bitcoinâs price in the market and mentions of the upcoming halving in media outlets.
âWe noticed how, as mentions of the halving were decreasing last fall, that tended to correlate with downward price movement,â The TIE CEO Joshua Frank told Cointelegraph on Feb. 25. âOnce that narrative picked up again, Bitcoin saw upward price movement,â he continued.
On Feb. 22, The TIE tweeted a chart showing the correlation. âThe number of mentions of the halving in crypto publications appears to have led price movement of BTC,â the social media post said. âMentions of the halving have hit an ATH.â
The halving is coming this year
Bitcoin is expected to undergo a halving event in May 2020, decreasing the coinâs mining reward from 12.5 BTC to 6.25. This essentially means less BTC will enter the market on a consistent basis.
As this event occurs every four years, Bitcoin has completed two other halving events since its 2009 inception. The event has historically led to higher prices for cryptoâs pioneer asset, leading many market participants to have a bullish bias for the event this year.Â
After looking at data from 22 different crypto media outlets, such as Cointelegraph, CoinDesk, Bitcoinist, and The Block, The TIE found a âmoderately strong and positiveâ correlation between mentions of Bitcoinâs halving and the assetâs price, Frank said.Â
âWhat is interesting here is not that the two variables are perfectly correlated, but that price has generally trailed the halving narrative,â Frank said. âAs digital asset publications have discussed it more, price has followed. That isnât to say that correlation equals causation though,â he added.
Digital gold was the narrative that drove price last year
Bitcoinâs value as digital gold was a key driver of price last year, and that seems to be shifting to a narrative in which Bitcoinâs upcoming halving pushes the assetâs price higher, Frank said.Â
Throughout Bitcoinâs history, many people and entities have compared the asset to gold in various ways.
âIt wasnât until last fall that we began seeing a rise in headlines on the halving and subsequent correlation with price,â Frank noted.
âOver the past few months there have been many instances in which one narrative seemingly takes a driverâs seat,â Frank said, pointing toward changes in narrative popularity. âIn October 2019 the digital gold narrative was pushed much harder than the halving narrative,â he said.Â
âKeep in mind, this data is relative over that period,â he clarified, adding, âIt isnât a measure of raw mentions.â
Just last week, Binance CEO Changpeng Zhao expressed his opinion that Bitcoin will rise further in price due to the halving.
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