But I sense that things are going to get exciting for two reasons, the news that Facebook are about to launch a crypto coin and the imminent halving of Bitcoin.Oh, add in the FOMO factor.The 'Fear of Missing Out'.
The price of bitcoin has hit its highest level since May 2018, as the cryptocurrency‘s remarkable surge shows no signs of coming to an end. Bitcoin passed $9,000 on Sunday, having begun 2019 trading well below $4,000.
Market analysts suggest the recent rumours that Facebook is about to launch its own cryptocurrency have helped fuel the cryptocurrency’s resurgence, with litecoin, ethereum and other virtual currencies also experiencing a revival. “Bitcoin has climbed past $9,000, reacting to reports of Facebook’s plans to unveil a digital currency,”
Christel Quek, chief commercial officer of blockchain firm BOLT, told The Independent. “Investors are scrambling back into crypto assets such as bitcoin and other alternate tokens, over optimism that they are becoming widely accepted and adopted by mainstream entities.
The first bitcoin ATM appears “Facebook’s entry into the crypto space perhaps signifies the biggest network potential for digital currencies capable of reaching into billions, and therefore indicates an upcoming shift in mainstream finance.”
The world’s most valuable cryptocurrency remains a long way off its peak price of close to $20,000, which it reached in late 2017. However, some experts predict its price could stretch beyond that before 2020 given its recent form.
Thomas Lee, Co-founder of Fundstrat Global, shared his thoughts about the recent cryptocurrency market developments in an interview with Binance CFO Wei Zhou. He believes that at this point, it is crucial for Bitcoin bulls to take out $10,000 level. Once it happens, the upside momentum will grow exponentially to take the price to $20,000 and even $40,000.
"If bitcoin somehow manages to get to [$10,000], 'it's very likely going to make a run to $40,000 within five months," he said. While it is hard to say, when this happens, the consequences will be enormous, as a sustainable move above this threshold will bring in big institutions to the market. "Every institution is going to realize, look,at $10,000 'it's likely to go back to its all-time high, which is double. There are very few things that can double. So I think FOMO truly gets triggered once bitcoin hits $10,000," Lee added.
Then there's - The halvening has begun There will only ever be 21 million bitcoin in existence. These bitcoin were not all created at once, but “mined”. They have been continually mined by people with powerful computers since bitcoin’s inception.
In order to ensure bitcoin’s supply will never go above 21 million, the reward for mining bitcoin halves every 210,000 blocks – which is roughly every four years. This is why some people refer to the halvening as bitcoin’s four-year cycle.
As time goes on it gets increasingly difficult to mine bitcoin, and the rewards for doing so drop significantly. Back in the day you could mine hundreds of bitcoin a month on an ordinary desktop PC.
Today, only specialised farms of computers, running in parts of the world with low electricity costs can do it. Right now, bitcoin miners get 12.5 BTC (around $78,750) every time they successfully mine a block. Come the halvening, that reward will, well, halve. Miners will only get 6.25 BTC for every successful block they mine.
Bitcoin, if you’ll remember, was a child of the financial crisis. It was created because people had lost faith in central banks and the wider financial system in general. The idea behind bitcoin – other than solving the problem of trust and removing third parties in financial transactions – was that its supply couldn’t be messed with.
In order to get over the financial crisis, many countries printed vast amounts of money to buy their way out of debt. And that money printing to fuel debt is still going on to this day. The money printed is money simply because the government says it is.
It’s not “backed” by anything. It’s backed by decree, hence the name fiat currency. Fiat literally means “a decree”. Satoshi Nakamoto set out to make a currency backed, not by decree, but by computer code.
A currency that could never be tampered with. A currency whose supply could never meddled with by central bankers. And a currency that needed no central authority whatsoever to function. The lack of a central autotomy is why Nakamoto referred to it as a “peer to peer” currency.
However, Nakamoto couldn’t simply release all 21 million bitcoin on the world at once. This would not have made for a fair distribution. So he set it in bitcoin’s code that it would take until roughly 2040 for all 21 million bitcoin to come into existence. As Nakamoto said in an email: “Coins have to get initially distributed somehow, and a constant rate seems like the best formula.”
And so, roughly every four years we experience a halvening. Due to the fundamentals of supply and demand, these halvenings usually result in massive price increases. All other things being equal, if demand remains the same and supply halves, prices will go up.
And that, many believe, is the main driving force behind bitcoin’s latest bull run. The halvening will happen in around one year from now, in May 2020.
Of course, as the saying goes, past performance is not a reliable predictor of future results, but in the run-up the bitcoin’s last halvening, its price increased by around 50%. And that was when there was a lot less interest in bitcoin in general. Now it has institutions and investors all over the world eyeing it up, no one really knows what could happen.
But I'm staying in!
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Article Excerpts from
https://www.exponentialinvestor.com/cryptocurrency/its-all-about-bitcoin-now-the-halvening-is-upon-us/
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