The price of bitcoin, which had been very volatile with a view to cutting it in half yesterday, has remained stable since the supply cut – up by just over 1% and hovering around $ 8,800 by bitcoin.
The bitcoin community has now turned to the next step for the world’s number one cryptocurrency and the price of bitcoin.
Last night, the number of bitcoins rewarded for those who maintain the bitcoin network, called miners, was cut in half, from 12.5 bitcoins to 6.25.
Many had warned that the price of bitcoin could fall in the aftermath of the halving, but most analysts seem confident that the price of bitcoin will eventually increase.
“The recent halving, although psychological impact, could create a catalyst that attracts new players to the market and helps increase the value of bitcoin,” said Gavin Smith, managing director of bitcoin and crypto -hong Kong based currency. Exchange and hedge fund Panxora, adding that he thinks bitcoin is “at the start of a multi-year bullish phase” although there may be “a bumpy road ahead”.
Last week, the Bitcoin and Crypto community was burned down by the legendary current macro investor, Paul Tudor Jones, who buys Bitcoin as an inflation hedge that he sees coming after an unprecedented coronavirus and d a central bank impression induced by foreclosure.
“As traditional markets become uncertain, we can expect more investors to use bitcoin as a hedge against inflation and protect their assets from currency devaluation,” said Smith.
Congress and the Federal Reserve have injected billions of dollars into the US economy in recent months to protect themselves from the coronavirus pandemic and blockages designed to slow its spread.
Massive action by the United States, as well as other governments and central banks around the world, has raised fears about inflation and uncontrollable debt.
However, investors have rushed toward the perceived security of the dollar since the start of the coronavirus crisis.
“The rest of the world must continue to print money or see their own currency drastically eroded in the face of unbeatable dollars,” said Jean-Marie Mognetti, managing director of digital asset manager CoinShares.
“Turkey, Brazil and Argentina are the perfect examples. Therefore, in a world where investors continue to seek to protect their portfolios from the behavior of global central banks, bitcoin, a digital currency whose supply is programmed to shrink until it reaches its maximum supply, seems to be the perfect cover for any portfolio of institutional investors. ”
If bitcoin does manage to become a safe haven and inflation protection, some analysts see the price of bitcoin accelerating over the next two years, potentially overshadowing its historic record of around $ 20,000 per bitcoin.
“I am confident that we will see a new historic record in 18 months, in the region of $ 20,000 to $ 50,000,” said Simon Peters, market analyst at Broker eToro, placing the top of the next bull market between 100 $ 000 and $ 120,000 per bitcoin. .
However, Peters warned that “another black swan event,” such as the coronavirus pandemic, or a second wave of COVID-19, could see the price of bitcoin fall.
Meanwhile, bitcoin miners are nervously watching the price of bitcoin – and hoping it will remain so.
“At this price point, miners using platforms from 2016 to 2018 will not be profitable,” said Rich Rosenblum, co-responsible for trading at GSR, the crypto market maker.
“They will start to exit the market, reducing the hash rate of bitcoin. It is likely that more bitcoins will be sold by miners to help finance new machines. In addition, the production of new machines has been slowed down by the pandemic and its impact on, depending on how long prices remain within this range, we might not see this level of mining activity recover before the year. next. ”
The hash rate of Bitcoin, a measure of computing power directed to the bitcoin network, hit a new historic record before being cut in half as miners attempted to remove as much bitcoin from the network as possible before the outage. ‘offer.
If too many miners start selling freshly minted bitcoin to pay for their operations, they could flood the market.
“If the price of bitcoin drops, it will likely force the weakest miners to cease operations,” said Jerry Chan, president and chief executive officer of TAAL, a publicly traded crypto mining company focused on bitcoin derived from SV bitcoin. .
“They sell bitcoin in their cash to pay their financial commitments to hash farms for accommodation and electricity. This constant liquidation floods the market downward, making it more difficult for other miners to continue operating at breakeven or profitable levels. ”