THE halving of bitcoin on May 12 could see the price of the world’s largest cryptocurrency (by market cap) rising as it has done following previous halvings, said investment platform eToro analyst, Simon Peters.
He said the halving, which takes place once every four years, will see the production of bitcoin cut in half in such a way that mining the cryptocurrency only generates 50% of the yield, thus reducing the supply of bitcoin and preventing extreme price inflation.
“Many analysts believe that a long bull run will follow. With each extended bull run, there has been an increased interest in bitcoin and crypto as an asset class, resulting in a widening of the investor base,” he said in a statement today.
According to Peters, during and after the first halving in 2012, the key investors were those who were already involved in the asset class.
Following the halving, bitcoin’s price went from US$13 on the day to a peak of US$230 within six months.
“After the second halving in 2016, bitcoin exploded both in terms of price and popularity due to the wide media coverage.
“Alongside the computer programmers and blockchain scientists were ordinary people, from management consultants to electricians and hairdressers,” he said.
Since then, the crypto industry has matured, with talks of regulation, institutional investors entering the market and central banks expressing an interest in the asset class, he said.
“Combine this with another price rally expected after the 2020 halving, and we could be on the precipice of crypto becoming a mainstay of investors’ portfolios in the same way as stocks, bonds and commodities.
“The price of bitcoin is currently around US$9,000, and if it starts heading towards the US$20,000 highs seen in the last rally, we expect even more people will want a slice of the action,” added Peters. — May 8, 2020, Bernama
