By While Bitcoin is still one of the world’s best investable assets over the last few years, there is no doubt that people are worried about its continued performance. Many people’s view of Bitcoin is predicated around its astronomical rise to $20,000 at the end of 2017.
Yet, although Bitcoin has fluctuated between $3,000 and $14,000 following the fall from those great heights, it has not kicked off in the same manner. Many still believe it will, and they have their reasons, with one of the bigger reasons being its scarcity in the coming years.
Bitcoin is designed to be anti-inflationary and work alongside simple macroeconomic principles. Because its supply naturally lessens over time, it less is entered into circulation, there is an expected increase in demand which should drive the price.
This makes a lot of sense from an economic standpoint, and because of this, a lot of people are hedging their bets on the price movement of the major cryptocurrency to change in May of 2020.
May 2020 is the date when the expected mining rewards halving will happen on the Bitcoin blockchain. This means that instead of adding 12.5 BTC to the circulating supply after each block is mined, it will be cut to 6.25 BTC, a significant decrease of 50 percent supply.
Blockstream’s Samson Mow is taking this date as the turning point for Bitcoin’s price as he responded to Dr. Doom, Nouriel Roubini, who was once again slating the coin.
Roubini stated that: “Bitcoin Isn’t Down Because of China, It’s Down Because You Don’t Need It,” while linking to an article on Forbes. Mow’s response was one of economic know-how, something that must be hard for the economist Roubini to swallow.
“Bitcoin is down because we’re still in the phase where we mint 1,800 $BTC a day. At $9,000 price levels, $16.2 million a day is required to maintain a stable price. The upcoming halving will fix this. Weak hands can GTFO.”
Reward halving has been seen as big events before, in Bitcoin, but also with other chains. Litecoin recently had its halving of mining rewards, and it was quite notable that the coin was the catalyst for crypto spring as it tripled in value while other coins were still very bearish.
The last time Bitcoin had a reward halving was in July 2016, and in that instance, the coin managed to rise from between $600-$700 all the way up to its all-time high of $20,000.
Bitcoin had grown over 33x from its price before the second halving and over 1,818x from its price before the first halving.
Comments