- Bitcoin (BTC), the flagship cryptocurrency, has been performing extremely well this year.
- The halvening event, when the supply of bitcoins is reduced by 50%, is approaching and many analysts believe this is a very significant event for the pseudonymous digital currency.
BTC Price Surges to Nearly $9,000 After Dropping to Around $3,000 in December 2018
Bitcoin (BTC), the world's most dominant cryptocurrency, is currently doing very well price-wise, especially compared to the state it was at the beginning of 2019 where it was roughly half the price that it is now.
Even other cryptocurrencies such as Litecoin (LTC) have been doing particularly well in the last few weeks and now a US venture capitalist has stated that while the current developments are rather interesting and exciting, she warned that there is likely going to be a shock supply in the works thanks to the Bitcoin halvening which is less than a year away.
“What I think might be happening is an anticipation of a coming supply shock in 2020,” Alyse Killeen, managing partner of StillMark Capital told Bloomberg, “In 2020 we’ll have just half the daily supply of bitcoin that we do now. While we’re looking ahead to this supply shock and halvening event, we’re also seeing greater demand for bitcoin and new on-ramps for more familiar and conventional sources. There’s the anticipation that there will be a broader group of users and consumers who have an appetite for bitcoin,” Killeen said.
A bitcoin halvening is a situation which takes place after every 210,000 blocks are mined by the blockchain and there have been two since the creation of Bitcoin in 2009. They are particularly significant because of the impact it will have on the Bitcoin price as a year after the first bitcoin halvening in November 2012, the Bitcoin price reached $1,000 which was the all-time high at the time. The second halvening that took place was in 2016 after which bitcoin experienced a bull run which peaked in December 2017 with nearly a $20,000 price.
Next Bitcoin Halvening Event to Take Place Around May 22, 2020
The next one will likely take place on May 22, 2020, unless any changes take place due to the change in the hash rate that will reduce block reward from 12.5 bitcoin to 6.25 bitcoin. Kileen also stated that the popularity of the Bitcoin lightning network Iis exposing the public to a wide variety of using bitcoin technology itself as the lightning network helps to create scaling within the blockchain by taking smaller transactions off it. The lightning network was heavily promoted this year through the lightning network challenge and this has proved to be the success.
“Some of these developments are among the most exciting things happening in the bitcoin world right now,” Killeen said.
If this next halvening will have the same effect on the Bitcoin price as the last two, it could see bitcoin rising to the same level or even above the peak it saw in 2017. It could lead to massive investment as a result and also could bring some of the hodlers out of hibernation as they wait for the price to increase.
The Bitcoin market has always been interesting to watch but the upcoming halvening adds another layer of excitement to it as the market is much different now and will be in 2020 compared to what it was during the last two halvenings and there is much more institutional money that has been put into the cryptocurrency market as it is much more mainstream than it used to be and along with the lightning network there have also been many other technological advancements within that space.