[Report] Philippines Transaction Volume During 2020 Bitcoin Halving
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While it probably turned out to be a non-event, the Bitcoin Halving would have a tremendous impact on Bitcoin's overall supply, with the halving cutting that supply every 4 years. The interest surrounding the event did not go unnoticed in the Philippines, with Google Trends data suggesting search interest for "bitcoin halving" peaking on May 10 - 16, 2020.
This article is supposed to be published on May 28, 2020, days after the Bitcoin halving so I decided to not let it go to waste and put it on the newsletter. Obviously the information below is a month old but I hope there’s still some value with some of the data.
I assumed searchers in Metro Manila would represent the majority of the interest for the event. However, data from Google Trends said* (May 2020 data) the capital ranked 4th in the regions with the most interest with Bitcoin Halving in the Philippines:
Let's remember the key events that happened globally that are said to have affected Bitcoin and the sentiments surrounding the halving:
The Coronavirus pandemic
The March 2020 global market flash crash
Actually, the Coronavirus pandemic has affected everything, or perhaps, it just accelerated some of the events that are bound to happen.
We already know that the price went down in March 2020. We already know that the price did not go up after the halving.
What I want to know is whether the bitcoin transactions in the Philippines increased or decreased during this period. Unfortunately, we cannot get data from the Bangko Sentral ng Pilipinas (BSP). But we can get through the transaction volumes of 2 peer-to-peer websites LocalBitcoins and Paxful.
First things first. Notice the difference in volume of these 2 peer-to-peer sites? That's because Paxful is actively marketing in the Philippines. Bloom Solutions and Moneybees, 2 license BSP-exchanges in the country also sell on Paxful. What's important for our topic are the weeks of
2020-03-14 - Price Crash to upper $3,000
2020-05-09 and 2020-05-16 - Weeks just before and after Bitcoin halving.
As you can see, despite the price decrease, transactions actually increased in the week of 2020-03-14. The volume increased immensely in the weeks before the Bitcoin halving.
Locally, SCI Ventures (BuyBitcoin.ph, Rebit.ph) also confirmed the increase in transaction volume in the Philippines:
"Definitely we saw an increase in transaction volume especially after that hard crash in March 12, with more buyers than sellers. In the lead up to the halving, activity slowed down in anticipation. But what really impacted things are the pandemic issues, with overall volume actually a bit higher than normal." - Miguel Cuneta, SCI Ventures
Volume is one thing, but what about the number of people who buy and sell? Mr. Cuneta said there are more buyers than sellers on their platforms. We should take note that SCI Ventures' BuyBitcoin.ph and Rebit.ph only offer straight conversion of fiat to crypto (and vice versa) at a price that's automatically set.
The number of buyers and sellers can be seen on the charts of crypto exchanges. If we look at the chart from Binance:
There are more sellers than buyers during the March 12, 2020 crash and the days just before the bitcoin halving. On the day after the crash, there are more buyers and the volume is higher vs the previous day.
Locally, we can look at PDAX and Coins Pro:
So both local exchanges have more sellers than buyers during both events, mimicking the global market behavior. The volume's way lesser vs global exchanges like Binance.
PDAX confirmed the volume in an email interview:
The volumes during the two weeks leading up to the May 2020 halving were slightly lower than those in March and April where we saw significant volume growth. New user sign-ups have increased remarkably during April and May.
The behavior of buyers and sellers is largely affected by the pandemic. According to Mr. Cuneta of SCI:
"What really impacted things are the pandemic issues, with overall volume actually a bit higher than normal. I believe it's because people who need cash sold some BTC in anticipation of the economic downturn, and the true bitcoin hodlers took the opportunity to buy the dip. Overall, we had more activity than pre-pandemic and halving period."
Globally, there is a massive difference between the market today and in 2016 (the last bitcoin halving before 2020). Mr. Cuneta attributed it to the following:
Market cap in July 2016 ($10 billion) vs May 2020 ($175 billion).
More options in terms of exchanges.
Institutional money can participate now via CME and others.
A clearer narrative in terms of digital gold and uncorrelated hedge aspect of Bitcoin, with big investors like Paul Tudor Jones taking position in Bitcoin
Less noise in terms of altcoins promising to be the "next bitcoin".
In one of the next articles, I will publish PDAX’s answers to two other questions related to their activities during the Bitcoin halving.
Tweet of the day from Miguel Cuneta of SCI Ventures: