In May, Bitcoin experienced its long-awaited block reward: the number of coins minted per block was halved.
Many had therefore expected a massive increase, as the market supply of BTC should technically decrease in relation to demand
And it did … kind of. Since halving, Bitcoin has gained 70 to 80 percent against the US dollar, with rising demand for the cryptocurrency driving its value soaring.
Because of this, analysts are closely monitoring the first halving of Zcash – the bitcoin fork introduced by Zooko Wilcox that focuses on user privacy. Each block reward halving or reduction has a diminishing effect on a cryptocurrency market, so the first halving is expected to be significant for Zcash.
Qiao Wang, a prominent crypto analyst and DeFi investor, explains:
“Also a friendly reminder of the halving of ZEC in one month. In contrast to the 3rd halving of BTC, which was completely exaggerated, the 1st ZEC halving is probably important. “
Halving ZCash is only days away
The halving of ZCash is now imminent in less than four days. Once the halving is activated, the rewards for the $ 700 million cryptocurrency for the miners will be halved.
In theory, this should lead to higher prices: A 50 percent drop in block premiums means that miners have 50 percent less cryptocurrency available for sale every day. Assuming the demand for ZEC continues, the price of the coin is likely to rise over time, provided there are no supply shocks.
However, according to Ryan Watkins, an analyst at Messari, that might not be the case either.
According to Watkins, the on-chain data suggests that there is reason to believe that miners are only a small fraction of the selling pressure that has brought ZEC down dramatically in recent years:
“Assuming that miners sell all of their ZEC as they mine it, historically they only made up less than 5% of the daily trading volume at ZEC last year. The measure isn’t perfect, but it’s good enough to show that the miners may not be what is holding ZEC back. “
For context, the Altcoins is notorious for falling without capturing a bid after trading higher than Bitcoin when it was first launched four years ago .
Still, many are convinced that ZEC has a viable long-term value proposition. The pseudonymous DeFi and crypto investor „DgnTec“ recently wrote:
“I’m changing my mind about ZEC. The need for a private SOV is even more evident at DeFi, where whales trade in fair game and are receptive to front runners and observers using virtue signaling. “
Ryan Selkis, CEO of Messari, joined this comment back in October. Selkis believes that ZEC could potentially be a „Trojan horse“ in this bull cycle as a „clean opt-in / opt-out data protection pool builds momentum with regulators while deploying long-term fungibility (which is not possible with BTC.“ is). „