Bitcoin Surged 10x After 2016 Halving; Will 2020 See a Similar Result?
In about every four years, Bitcoin experiences a block reward halving, a mechanism that reduces the rate in which new bitcoin is mined by miners. | Source: Shutterstock
By CCN: In about every four years, the Bitcoin blockchain network experiences a block reward halving, a mechanism that reduces the rate in which new bitcoin is generated or mined by miners.
The block reward halving has typically served as a key fundamental factor behind the dominant cryptocurrencys major rallies.
Price one year before first halvening : $2.55
Price one year after first halvening : $1,037
Price one year before second halvening : $268
Price one year after second halvening : $2,525
Price one year before the third halvening: $7,100
Price one year after the third halvening:
— The Rhythm Trader (@Rhythmtrader) May 17, 2019
From July 2016 to 2017, within a year following bitcoins block reward halving, the bitcoin price spiked by nearly 10-fold from $268 to $2,525. In previous years, the asset similarly saw large gains subsequent to the halving.
Will bitcoin continue to surge throughout 2020?
The past performance of an asset does not serve as a guarantee for the future performance of the asset. As such, merely because bitcoin saw substantial gains in previous years triggered by a particular factor, it does not definitively guarantee that the asset would increase by a similar rate in the future.
However, the block reward halving of the Bitcoin blockchain network poses a significant impact on the rate in which bitcoin is generated and supplied to the market.
If the demand for the asset remains the same or increases over the medium- to long-term but the supply of the asset decreases, it may reasonably cause the value of the asset to spike.
For that reason, after the first and second block reward halving of bitcoin, the price of the asset rose anywhere between 10- to 500-fold against the U.S. dollar.
Max Keiser, a host of the Keiser report on RT, has recently said that the bitcoin price is expected to surge to $100,000 and that institutions would play a key role in driving up the demand for the asset.
Bitcoin is making the institutional play now, and there is going to be a mass fear of missing out… or FOMO is going to jump to the institutional level and they have got the big bucks, and now we are going to see some big moves, Keiser said.
With trusted custodial service providers in the likes of Fidelity preparing to officially launch a regulated custodial platform for investors and institutions such as TD Ameritrade reporting tens of thousands of clients already trading crypto-related assets, the prediction of a large inc ...Read full story on CCN