Bitcoin tops $8,000 for first time since March amid halving hype Bitcoin tops $8,000 for first time since March amid halving hype Share By Vildana Hajric
Excitement over Bitcoin’s upcoming halving and an overall risk-on environment are pushing up cryptocurrencies, with the largest token reaching its highest level since before the coronavirus-induced crash.
Bitcoin gained as much as 8.7 per cent to $8,406, according to composite prices on Bloomberg.Other cryptocurrencies also advanced, with Bitcoin Cash and Litecoin up more than 6.5 per cent each.
Bloomberg
Cryptocurrencies have moved in tandem with riskier assets — stocks are up more than 30 per cent — over the past month but many crypto fans are also pointing to Bitcoin’s so-called halving, which reduces the number of rewards miners receive.Ahead of the token’s last two halvings (it’s sometimes referred to as a halvening), it surged, with some enthusiasts positing the same could happen this time around.
“The Bitcoin halving in under two weeks may explain some of the bullish activity by speculators,” Craig Erlam, senior market analyst at Oanda, wrote in a note.“But you have to think that an event that has been in the diary for so long will already be priced in.This could see some of these moves faded as we hit halving day.” Get set for Bitcoin ‘halving’! Here’s what that means Be ready for Bitcoin ‘halving’
27 Apr, 2020
Bitcoin is notoriously volatile, prone to sudden price surges and swift reversals that can wipe out millions of dollars of value in a matter of minutes.Those changes are often mysterious to market observers, given the digital currency’s lack of fundamentals, or ties to the real economy.Bitcoin has another quirk, one that was built into the code that gave it birth: every so often, the formula that governs the rate at which new tokens are created changes.
As another such event — called a halving — approaches, Bitcoin supporters and skeptics are debating what kind of impact it may have on the coin’s value.Where do baby Bitcoin come from, anyway?
27 Apr, 2020
One of the characteristics that gave rise to a fascination with Bitcoin is the way its pseudonymous creator, Satoshi Nakamoto, tied the creation of coins to the work needed to prevent counterfeiting.Bitcoin is generated by so-called miners whose computers perform complex calculations that validate the transactions on what’s known as the blockchain, a public digital ledger.The miners compete with each other to earn newly-issued tokens known as a block reward.What is a Bitcoin halving?
27 Apr, 2020
A halving – sometimes referred to as halvening – is a planned reduction in rewards miners receive (the term is mentioned in Bitcoin’s code).Halvings happen once every four years or so – more precisely, every 210,000 blocks of transactions.As the name suggests, each one cuts the amount of Bitcoin miners receive per block reward in half.
At Bitcoin’s launch in 2009, miners received 50 Bitcoin per block, but that reward was reduced to 25 in the first halving, in 2012, to 12.5 in 2016, and will fall to 6.25 tokens in the next.What’s the point?
27 Apr, 2020
Bitcoin’s issuance is limited in several ways.For one thing, according to its founding protocol, just 21 million will ever be in circulation.That’s appealing to many who fear that fiat money — the kind issued by governments — can lose its value to inflation if too much is printed.Supporters argue that Bitcoin, by contrast, will be guaranteed to increase.Halving also prevents inflation by acting to periodically slow the pace at which Bitcoin are created, so as to not outstrip demand.To other observers, halvings can serve as a hurry-up-and-buy signal by suggesting that slower growth could be accompanied by a bump in price.
When is Bitcoin’s halving happening?
27 Apr, 2020
The next one is expected to take place in May 2020 and the internet is replete with countdown clocks.In general, predicting the exact date is hard because the time it takes to generate new blocks can slow down or speed up depending on a number of factors.Going by most estimates, there will be 64 Bitcoin halvings before that 21 million maximum is reached sometime around 2140, at which point halvings will stop.
Once that happens, miners will no longer collect rewards and are expected to rely on charging fees for handling transactions, similar to what credit card companies do.
However, with Wednesday’s jump above $8,000, the largest cryptocurrency entered overbought territory based on the GTI Global Strength Indicator.Assets are considered overbought if the reading exceeds 70 and could indicate that it may be difficult for the token to notch additional gains in the short-run.
Bloomberg
Here’s what other market watchers are saying:
Christel Quek, chief commercial officer and co-founder at Bolt Global:“This is an unprecedented time as liquidity remains a priority for investors fleeing equity markets.Therefore, while Bitcoin should rise into $10,000s after the halving, it could be followed with a price drop as investors engage in profit taking,” said Quek.“No level of technical support can stand when the economy is drained.”
Charles Hayter, co-founder and CEO at CryptoCompare:“The crypto market in 2020 is very different from previous halvings, and the impact of miners selling their Bitcoins differs substantially this time around.This will likely dampen the post-halving impacts from miner selling,” he said.“The impact of Covid-19 so close to the halving and Bitcoin’s correlation to equity markets means we may not see significant surges in price due to the halving.”.
