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Two Weeks and Counting: Experts Warn Bitcoin Halving May Be a Nonevent

Two Weeks and Counting: Experts Warn Bitcoin Halving May Be a Nonevent

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Due to the uncertainty surrounding the global financial sector at the moment, experts are still not sure of the impact that the upcoming halving will have on Bitcoin’s value.

Over the course of the past month, the crypto world has understandably been abuzz with talks of the upcoming Bitcoin (BTC) halving event that is scheduled to take place in a little over two weeks. For starters, it is undoubtedly one of the most — if not the most — anticipated crypto events of 2020. However, due to the COVID-19 pandemic, many analysts are still not sure if the event will have a substantial impact on the monetary future of Bitcoin.

It is interesting to note that while a number of other traditional assets have seen their values drop quite drastically since the beginning of March, Bitcoin has been mostly able to stave off the huge amount of bearish pressure that has come its way and maintain its value around the $7,000 mark. In fact, on April 23, the premier cryptocurrency witnessed a pre-halving pump that saw the asset’s value move past the $7,500 threshold.

What’s ahead? 

While all of the aforementioned signs have been positive for Bitcoin as an investment vehicle, it seems as though the element of uncertainty is very high in comparison to previous halvings.

To gain a better understanding of the situation, Cointelegraph reached out to Scott Freeman, the co-founder of JST Capital, a financial services firm specializing in the digital asset market. He stated that having spoken to a number of individuals operating within the space including miners and institutional investors, the one consistent message that he has heard is that the halving will be somewhat of a nonevent as far as Bitcoin price action goes:

“The halving has been on everyone’s radar screen for a long time and as such, the effect on markets should already be factored into the price of BTC. The halving may affect the profitability of some miners, but we expect at this point that every miner has already made adjustments to their business models.”

In a somewhat similar vein, Meltem Demirors, the chief strategy officer of the digital asset management firm CoinShares, jokingly told Cointelegraph that just like the rest of the economy, the Bitcoin rally around the halving has been canceled until further notice because of the ongoing coronavirus situation. However, she did add that her firm has observed a number of key shifts that have driven increased demand for digital assets. Demirors opined:

“We see demand in the form of increased utility for Bitcoin beyond financial speculation and a growing amount of institutional interest, while new markets for derivatives are increasingly driving prices.”

Market uncertainty divides experts over Bitcoin’s future

Traditionally, a Bitcoin halving event is usually followed by a lot of market hype or fanfare that invariably helps push the price of the currency in an upward direction. However, this time around things are quite different.

To better assess the flagship crypto’s future, Cointelegraph reached out to Jose Llisterri, the co-founder of Interdax, a crypto exchange platform. He pointed out that 16 months following each of the previous having events, the value of the Bitcoin–United States dollar pair has tended to approach its all-time high. He added: “If this trend plays out again, a new all-time high may be reached sometime around or after September 2021.”

Not only that, Llisterri also highlighted that following this upcoming event, only the most efficient miners will be able to continue, as the halving will double their operational costs almost overnight. Furthermore, once inefficient miners shut down, a favorable difficulty adjustment for the remaining miners may be witnessed, thus potentially allowing profit margins to improve as well. He added:

“What’s different this time is that there is now a solid derivatives market, so the impact of miners accumulating might not be as strong as it was during the bull runs in 2013 and 2017. Derivatives such as futures and perpetual swaps give investors and miners the opportunity to hedge their holdings or bet on the future price path of bitcoin, enabling fair price discovery.”

In regard to the matter, Ivailo Jordanov of 7percent Ventures, a United Kingdom-based venture capital firm, believes that due to the ongoing fiscal stimulus, more and more people have started looking for assets that are scarce in nature. In his view, the Bitcoin halving will add to this element of scarcity and potentially make crypto more attractive to the masses.

Similarly, Trent Barnes of ZeroCap, an Australia-based digital assets and foreign exchange solutions firm, believes that due to the number of variables that are currently in play, it is difficult to give an accurate forecast as to how Bitcoin will perform in this current economic climate, adding:

“We expect intense short-term volatility following the halving, both topside and downside. Longer-term, we see price appreciation in line with the stock-to-flow model. I actually wouldn’t be surprised to see it fly under the radar of the general public, meanwhile, the savvy investors will continue to accumulate in the background.”

Lastly, Fredrik Johansson, the founder of Libonomy — a blockchain ecosystem regulated by artificial intelligence — believes that previously the halving events were generally accompanied by great hype in the media, leading to people being exposed to Bitcoin. However, most investors and crypto enthusiasts are now well versed in Bitcoin, and thus a mindless financial boom may not be in the works this time around.

Pundits feel that Google Trends data is meaningless

According to data available on Google Trends, searches pertaining to the term “cryptocurrency” have dipped by nearly 50% since June 2019. However, experts such as Neel Popat, the CEO and co-founder of the cryptocurrency investment platform Donut, are of the opinion that such data is quite limited in its overall scope, as there are several other indicators that can be used to gauge consumer interest in crypto:

“Within the ecosystem, there are new growth areas such as ‘DeFi,’ generating a lot of interest. In terms of masses, they tend to get more excited when there are events and price rises, so if one was to take place post-halving, that's the perfect storm for widespread interest.”

Similarly, Emre Tekisalp, the head of business development at O(1) Labs — the developer behind the Coda protocol — told Cointelegraph that contrary to what data on Google Trends may suggest, curiosity in cryptocurrency as a means of payment and fuel to power the modern-day digital economy has grown substantially among the general public, as well as among governments and various institutions around the world:

“The roll-out of central bank digital currencies (CBDCs) will ultimately make the general public more aware of decentralized alternatives such as Bitcoin and Ethereum.”

Lastly, Nick Hill, the vice president of business development at the asset management firm Invictus Capital, believes that because of all of the substantial stimulus packages that governments all over the world have been rolling out, conversations regarding how money is created in the first place have been reignited. This, in his view, will invariably lead people to once again talk about crypto, as well as how this unique asset class can serve as a bulwark against unfettered money creation by central banks.

Investor confidence in Bitcoin may rise

With traditional commodities such as oil and stocks plunging hard in recent months, with the value of the former reaching its all-time low on April 20, it is worth looking at whether or not the coming few months will see an increase in market confidence in relation to Bitcoin as well as the crypto industry in general.

Expounding his views on the matter, Tanner Philp, the head of corporate development at Kik — a social media messaging platform — told Cointelegraph that it has been extremely impressive to see market confidence remain high in regard to Bitcoin despite all of the insane bearish pressure that the global finance sector has witnessed over the past couple of months:

“I think the capital flight in Bitcoin and crypto, in general, is less correlated to the halvening and more so a need for people to establish cash positions in the midst of a pandemic. My view is that for the most part crypto is still held as a speculative asset, but that for it to emerge as a multi-trillion dollar asset, it needs to move beyond that to be used as a currency. I think the industry is making strides there."

In regard to whether or not investors have become more educated about Bitcoin, as well as crypto technology in general, it is quite clear that since the initial coin offering bubble of 2017, people have become more mature in the way they evaluate various altcoins and other associated crypto offerings.

But while awareness is higher than ever before, digital currencies are, realistically speaking, still quite far from universal adoption. However, many experts believe that during times of crisis — such as the current one — new businesses and technologies can emerge, and therefore right now could be a great time for crypto to show its advantages and gain widespread adoption.

On the subject, Andy Ji, the co-founder of Ontology — a public blockchain and distributed collaboration platform — believes that even though Bitcoin’s dizzying price highs of late 2017 and the subsequent drop have given people the impression that the asset is subject to uncontrollable volatility, Bitcoin has recently reverted to a more regular pattern of growth that has been relatively undisturbed by external market fluctuations:

"There has been a heightened awareness among citizens over the past twelve months around the potential of Bitcoin, its core attributes, and the Bitcoin-powered avenues users can pursue. Now, each month, there are new swathes of savvy digital payments users emerging, aided, in part, by the heightened application of crypto and blockchain technology more broadly among enterprises with household names.”

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Key shipping company files for Chapter 11 bankruptcy

The Illinois-based general freight trucking company filed for Chapter 11 bankruptcy to reorganize.

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The U.S. trucking industry has had a difficult beginning of the year for 2024 with several logistics companies filing for bankruptcy to seek either a Chapter 7 liquidation or Chapter 11 reorganization.

The Covid-19 pandemic caused a lot of supply chain issues for logistics companies and also created a shortage of truck drivers as many left the business for other occupations. Shipping companies, in the meantime, have had extreme difficulty recruiting new drivers for thousands of unfilled jobs.

Related: Tesla rival’s filing reveals Chapter 11 bankruptcy is possible

Freight forwarder company Boateng Logistics joined a growing list of shipping companies that permanently shuttered their businesses as the firm on Feb. 22 filed for Chapter 7 bankruptcy with plans to liquidate.

The Carlsbad, Calif., logistics company filed its petition in the U.S. Bankruptcy Court for the Southern District of California listing assets up to $50,000 and and $1 million to $10 million in liabilities. Court papers said it owed millions of dollars in liabilities to trucking, logistics and factoring companies. The company filed bankruptcy before any creditors could take legal action.

Lawsuits force companies to liquidate in bankruptcy

Lawsuits, however, can force companies to file bankruptcy, which was the case for J.J. & Sons Logistics of Clint, Texas, which on Jan. 22 filed for Chapter 7 liquidation in the U.S. Bankruptcy Court for the Western District of Texas. The company filed bankruptcy four days before the scheduled start of a trial for a wrongful death lawsuit filed by the family of a former company truck driver who had died from drowning in 2016.

California-based logistics company Wise Choice Trans Corp. shut down operations and filed for Chapter 7 liquidation on Jan. 4 in the U.S. Bankruptcy Court for the Northern District of California, listing $1 million to $10 million in assets and liabilities.

The Hayward, Calif., third-party logistics company, founded in 2009, provided final mile, less-than-truckload and full truckload services, as well as warehouse and fulfillment services in the San Francisco Bay Area.

The Chapter 7 filing also implemented an automatic stay against all legal proceedings, as the company listed its involvement in four legal actions that were ongoing or concluded. Court papers reportedly did not list amounts for damages.

In some cases, debtors don't have to take a drastic action, such as a liquidation, and can instead file a Chapter 11 reorganization.

Truck shipping products.

Shutterstock

Nationwide Cargo seeks to reorganize its business

Nationwide Cargo Inc., a general freight trucking company that also hauls fresh produce and meat, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Northern District of Illinois with plans to reorganize its business.

The East Dundee, Ill., shipping company listed $1 million to $10 million in assets and $10 million to $50 million in liabilities in its petition and said funds will not be available to pay unsecured creditors. The company operates with 183 trucks and 171 drivers, FreightWaves reported.

Nationwide Cargo's three largest secured creditors in the petition were Equify Financial LLC (owed about $3.5 million,) Commercial Credit Group (owed about $1.8 million) and Continental Bank NA (owed about $676,000.)

The shipping company reported gross revenue of about $34 million in 2022 and about $40 million in 2023.  From Jan. 1 until its petition date, the company generated $9.3 million in gross revenue.

Related: Veteran fund manager picks favorite stocks for 2024

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Key shipping company files Chapter 11 bankruptcy

The Illinois-based general freight trucking company filed for Chapter 11 bankruptcy to reorganize.

Published

on

The U.S. trucking industry has had a difficult beginning of the year for 2024 with several logistics companies filing for bankruptcy to seek either a Chapter 7 liquidation or Chapter 11 reorganization.

The Covid-19 pandemic caused a lot of supply chain issues for logistics companies and also created a shortage of truck drivers as many left the business for other occupations. Shipping companies, in the meantime, have had extreme difficulty recruiting new drivers for thousands of unfilled jobs.

Related: Tesla rival’s filing reveals Chapter 11 bankruptcy is possible

Freight forwarder company Boateng Logistics joined a growing list of shipping companies that permanently shuttered their businesses as the firm on Feb. 22 filed for Chapter 7 bankruptcy with plans to liquidate.

The Carlsbad, Calif., logistics company filed its petition in the U.S. Bankruptcy Court for the Southern District of California listing assets up to $50,000 and and $1 million to $10 million in liabilities. Court papers said it owed millions of dollars in liabilities to trucking, logistics and factoring companies. The company filed bankruptcy before any creditors could take legal action.

Lawsuits force companies to liquidate in bankruptcy

Lawsuits, however, can force companies to file bankruptcy, which was the case for J.J. & Sons Logistics of Clint, Texas, which on Jan. 22 filed for Chapter 7 liquidation in the U.S. Bankruptcy Court for the Western District of Texas. The company filed bankruptcy four days before the scheduled start of a trial for a wrongful death lawsuit filed by the family of a former company truck driver who had died from drowning in 2016.

California-based logistics company Wise Choice Trans Corp. shut down operations and filed for Chapter 7 liquidation on Jan. 4 in the U.S. Bankruptcy Court for the Northern District of California, listing $1 million to $10 million in assets and liabilities.

The Hayward, Calif., third-party logistics company, founded in 2009, provided final mile, less-than-truckload and full truckload services, as well as warehouse and fulfillment services in the San Francisco Bay Area.

The Chapter 7 filing also implemented an automatic stay against all legal proceedings, as the company listed its involvement in four legal actions that were ongoing or concluded. Court papers reportedly did not list amounts for damages.

In some cases, debtors don't have to take a drastic action, such as a liquidation, and can instead file a Chapter 11 reorganization.

Truck shipping products.

Shutterstock

Nationwide Cargo seeks to reorganize its business

Nationwide Cargo Inc., a general freight trucking company that also hauls fresh produce and meat, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Northern District of Illinois with plans to reorganize its business.

The East Dundee, Ill., shipping company listed $1 million to $10 million in assets and $10 million to $50 million in liabilities in its petition and said funds will not be available to pay unsecured creditors. The company operates with 183 trucks and 171 drivers, FreightWaves reported.

Nationwide Cargo's three largest secured creditors in the petition were Equify Financial LLC (owed about $3.5 million,) Commercial Credit Group (owed about $1.8 million) and Continental Bank NA (owed about $676,000.)

The shipping company reported gross revenue of about $34 million in 2022 and about $40 million in 2023.  From Jan. 1 until its petition date, the company generated $9.3 million in gross revenue.

Related: Veteran fund manager picks favorite stocks for 2024

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Tight inventory and frustrated buyers challenge agents in Virginia

With inventory a little more than half of what it was pre-pandemic, agents are struggling to find homes for clients in Virginia.

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No matter where you are in the state, real estate agents in Virginia are facing low inventory conditions that are creating frustrating scenarios for their buyers.

“I think people are getting used to the interest rates where they are now, but there is just a huge lack of inventory,” said Chelsea Newcomb, a RE/MAX Realty Specialists agent based in Charlottesville. “I have buyers that are looking, but to find a house that you love enough to pay a high price for — and to be at over a 6.5% interest rate — it’s just a little bit harder to find something.”

Newcomb said that interest rates and higher prices, which have risen by more than $100,000 since March 2020, according to data from Altos Research, have caused her clients to be pickier when selecting a home.

“When rates and prices were lower, people were more willing to compromise,” Newcomb said.

Out in Wise, Virginia, near the westernmost tip of the state, RE/MAX Cavaliers agent Brett Tiller and his clients are also struggling to find suitable properties.

“The thing that really stands out, especially compared to two years ago, is the lack of quality listings,” Tiller said. “The slightly more upscale single-family listings for move-up buyers with children looking for their forever home just aren’t coming on the market right now, and demand is still very high.”

Statewide, Virginia had a 90-day average of 8,068 active single-family listings as of March 8, 2024, down from 14,471 single-family listings in early March 2020 at the onset of the COVID-19 pandemic, according to Altos Research. That represents a decrease of 44%.

Virginia-Inventory-Line-Chart-Virginia-90-day-Single-Family

In Newcomb’s base metro area of Charlottesville, there were an average of only 277 active single-family listings during the same recent 90-day period, compared to 892 at the onset of the pandemic. In Wise County, there were only 56 listings.

Due to the demand from move-up buyers in Tiller’s area, the average days on market for homes with a median price of roughly $190,000 was just 17 days as of early March 2024.

“For the right home, which is rare to find right now, we are still seeing multiple offers,” Tiller said. “The demand is the same right now as it was during the heart of the pandemic.”

According to Tiller, the tight inventory has caused homebuyers to spend up to six months searching for their new property, roughly double the time it took prior to the pandemic.

For Matt Salway in the Virginia Beach metro area, the tight inventory conditions are creating a rather hot market.

“Depending on where you are in the area, your listing could have 15 offers in two days,” the agent for Iron Valley Real Estate Hampton Roads | Virginia Beach said. “It has been crazy competition for most of Virginia Beach, and Norfolk is pretty hot too, especially for anything under $400,000.”

According to Altos Research, the Virginia Beach-Norfolk-Newport News housing market had a seven-day average Market Action Index score of 52.44 as of March 14, making it the seventh hottest housing market in the country. Altos considers any Market Action Index score above 30 to be indicative of a seller’s market.

Virginia-Beach-Metro-Area-Market-Action-Index-Line-Chart-Virginia-Beach-Norfolk-Newport-News-VA-NC-90-day-Single-Family

Further up the coastline on the vacation destination of Chincoteague Island, Long & Foster agent Meghan O. Clarkson is also seeing a decent amount of competition despite higher prices and interest rates.

“People are taking their time to actually come see things now instead of buying site unseen, and occasionally we see some seller concessions, but the traffic and the demand is still there; you might just work a little longer with people because we don’t have anything for sale,” Clarkson said.

“I’m busy and constantly have appointments, but the underlying frenzy from the height of the pandemic has gone away, but I think it is because we have just gotten used to it.”

While much of the demand that Clarkson’s market faces is for vacation homes and from retirees looking for a scenic spot to retire, a large portion of the demand in Salway’s market comes from military personnel and civilians working under government contracts.

“We have over a dozen military bases here, plus a bunch of shipyards, so the closer you get to all of those bases, the easier it is to sell a home and the faster the sale happens,” Salway said.

Due to this, Salway said that existing-home inventory typically does not come on the market unless an employment contract ends or the owner is reassigned to a different base, which is currently contributing to the tight inventory situation in his market.

Things are a bit different for Tiller and Newcomb, who are seeing a decent number of buyers from other, more expensive parts of the state.

“One of the crazy things about Louisa and Goochland, which are kind of like suburbs on the western side of Richmond, is that they are growing like crazy,” Newcomb said. “A lot of people are coming in from Northern Virginia because they can work remotely now.”

With a Market Action Index score of 50, it is easy to see why people are leaving the Washington-Arlington-Alexandria market for the Charlottesville market, which has an index score of 41.

In addition, the 90-day average median list price in Charlottesville is $585,000 compared to $729,900 in the D.C. area, which Newcomb said is also luring many Virginia homebuyers to move further south.

Median-Price-D.C.-vs.-Charlottesville-Line-Chart-90-day-Single-Family

“They are very accustomed to higher prices, so they are super impressed with the prices we offer here in the central Virginia area,” Newcomb said.

For local buyers, Newcomb said this means they are frequently being outbid or outpriced.

“A couple who is local to the area and has been here their whole life, they are just now starting to get their mind wrapped around the fact that you can’t get a house for $200,000 anymore,” Newcomb said.

As the year heads closer to spring, triggering the start of the prime homebuying season, agents in Virginia feel optimistic about the market.

“We are seeing seasonal trends like we did up through 2019,” Clarkson said. “The market kind of soft launched around President’s Day and it is still building, but I expect it to pick right back up and be in full swing by Easter like it always used to.”

But while they are confident in demand, questions still remain about whether there will be enough inventory to support even more homebuyers entering the market.

“I have a lot of buyers starting to come off the sidelines, but in my office, I also have a lot of people who are going to list their house in the next two to three weeks now that the weather is starting to break,” Newcomb said. “I think we are going to have a good spring and summer.”

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