The developers of Zcash have announced that the privacy-focused digital asset will undergo its first halving, which is coming just six months after the Bitcoin halving event occurred.
In May this year, the much-anticipated Bitcoin halving was the third ever halving that the coin underwent since it was created in 2009. The halving event saw the number of coin rewards cut by half, which made analysts and experts predict that the coin would experience a massive surge after it happened.
This idea is not far-fetched as it has been a phenomenon with previous halvings and another reason was that the total supply of the coin would be limited, and demand will drive its price higher.
Halving presents an opportunity for a surge
True to their predictions, Bitcoin’s price has over the months since the halving witness a massive surge as it has seen an increase of over 70% against the dollar. Another accurate prediction was that the coin experienced a massive demand, which has added to the rise in the leading digital assets price.
This is the main reason analysts have been anticipating the first halving of Zcash, a hard fork of Bitcoin that was created by Zooko Wilcox. With every halving comes a diminishing effect in the market of particular digital assets. The first halving of Zcash in this regard is expected to spell bigger things for the privacy-focused digital asset.
According to the statement of a famous analyst and investor in the DeFi sector, Qiao Wang, he said that traders and investors need to keep tabs on the first halving of the privacy-focused coin because it matters. Unlike the already overhyped Bitcoin halving that was talked about years before it finally came.
With Zcash ready to undergo its halving in the next few days, miners in the network will be bracing up to see their rewards cut in half just like Bitcoins halving. A theory that backs up halving making the price of a particular digital asset swell is that a cut in half means a reduction in the rewards, which means miners will have fewer tokens to sell.
Miners are not responsible for the woeful performance of the coin in recent years
If all things go as planned after the halving and traders continue to buy the privacy-focused coin, the coin should experience a price surge in the days after the halving. However, one thing that could hinder all this is if there is an internal error on the part of the developers and supply does not come as expected; the coin might not hold up and increase in value.
Messari analyst Ryan Watkins has noted that miners in the network are only a smaller part of the selling pressure, which has seen the Zcash token decline in the last few years.”If miners were to sell all their Zcash as it is being mined, it would mean that they have made up less than a trading volume of 5% over the last couple of years”, he said.
Going further, Watkins notes that even though these statistics are not encouraging, it just goes further to show that the miners are not responsible for the coins shabby performance in the last few years. The coin has a renowned history for falling without any buying activity even though its price was much higher than that of Bitcoin when it launched four years ago.
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