Bitcoin Tops $10K For 1st Time Since February, Ahead Of Halving. Could Peak At $533,431 ‘If History Repeats Itself’
Notoriously volatile, bitcoin’s historic landscape is full of spectacular peaks and valleys. Another peak happened Friday, when the world’s biggest cryptocurrency briefly rallied above $10,000 ahead of a technical event called block reward halving that some see as a catalyst for longer-term price gains.
Block reward halving is expected to take happen May 12. An intentional feature of bitcoin to control inflation, the halving was designed by bitcoin creator Satoshi Nakamoto. It will cut in half the rewards miners receive for processing transactions, Bloomberg reported.
Launched in 2009, the price of one bitcoin was a few dollars in its early years. It started 2017 at about $1,000 then reached an all-time peak of almost $20,000 per bitcoin in late 2017. Since then, the price has fluctuated, averaging about $7,000 as of April 2020, according to Investopedia.
Two years ago, the cryptocurrency market was swimming in initial coin offerings (ICOs), launching new digital currencies that promised to decentralize industries from social media to cloud computing. Investors expected one or more of those coins to break out and challenge bitcoin’s dominance but that never happened. As of December 2019, bitcoin accounts for 67 percent of the market value of cryptocurrencies, according to Coinmarketcap.com.
This is the first time bitcoin has breached five figures since Feb. 24, Bloomberg reported. This has happened ahead of the upcoming halving, which could take place as soon as next week.
The halving event is highly anticipated, as the bitcoin reward for validating one block will be reduced by half, Cointelegraph reported. There have been two halving events since the cryptocurrency’s 2009 inception. They happen after every 210,000 blocks are mined, which takes about four years. Both previous halving events spiked considerable price rallies. The first in 2012 brought the BTC price from $11 to $1,000 within a year. In the year that preceded the second halving, the price of Bitcoin increased steadily.
Experts and investors are making bitcoin price predictions as the halving approaches.
Paul Tudor Jones, founder and CEO of Tudor Investment Corp., said he bought bitcoin futures as a hedge against inflation he sees being stoked by massive fiscal spending and bond-buying by central banks to combat the coronavirus pandemic.
U.S. investor Anthony “Pomp” Pompliano provided a bullish stance toward the halving and the potential growth in bitcoin’s value after the event in a letter to his subscribers on April 29.
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“I believe that the Bitcoin halving being executed at the same time that the Federal Reserve (and other central banks around the world) is injecting trillions into the financial system will serve as rocket fuel for bitcoin,” Pompliano wrote.
Vijay Ayyar, Singapore-based head of business development at crypto exchange Luno, agreed. “Markets have been bullish since the March lows and this is across asset classes, including crypto,” Ayyar said. “Money-printing by the Fed and other central banks globally have given a lot of confidence to investors that the economy will be supported no matter what.”
Pantera Capital Founder and CEO Dan Morehead was bullish in a letter to investors at the end of April. “If history were to repeat itself, Bitcoin would peak in August 2021 — at $533,431,” he said. “Just sayin’ that there’s more than a 50-50 chance Bitcoin goes up — and goes up big.”