Introduction
In the run up to Bitcoin’s legendary halving, the valuation of the cryptocurrency is experiencing one of its strongest Bull runs. Bitcoin has rallied hard to climb over the $9K level and is expected to keep on climbing right through the year.
In a letter to their investors, Pantera Capital CEO, Dan Morehead made a rather buoyant estimation. He stated that Bitcoin is going to reach the $500,000 mark by year ending in 2021!
He pointed out that the Coronavirus pandemic, the falling oil prices and the low confidence in gold are all going to work in Bitcoin’s favour to drive up prices and valuation.
In this article, we are going to focus on three critical elements-
- The 12 May 2020 Halving of the Bitcoin
- The possibilities Bitcoin offers as an investment asset
- The global repercussions on the world’s economic systems
Bitcoin Halving: Why is it so important?
Unlike fiat currencies, Bitcoin is a limited currency. Most of us know that there are only 21 Million Bitcoins in the world. In order to incentivize Miners who, mine Bitcoins, they are given rewards of Bitcoins for every block they mine.
This is what the halving refers to. It seeks to cut down in half the rewards of the miners from 12.5 Bitcoins to 6.25 Bitcoins. The halving is important as it seeks to maintain an equilibrium between production of currency (Bitcoin Mining) and circulation of currency (Bitcoin Scarcity).
The halving is rooted in the theoretical foundations of Bitcoin. It seeks to check inflation and control prices and assets from devaluations. A good example is the price of a house in 1970 and in 2020. Every there is an influx of currency in the market by the authorities (through printing cash) it reduces the power of money or the purchasing power.
Bitcoin’s halving process seeks to control or limit inflation. It also seeks to cap a limit on the authority of policy makers who can very easily demean the value of your hard-earned money by taking a stupid decision.
Will Bitcoin still be a good Investment Option post the Halving?
According to Wall Street analysts and Cryptocurrency Exchanges, Bitcoin is exhibiting a strong rallying trend in 2020. Many are also pointing out that Bitcoin flattening has already occurred, thereby stating a positive future for the crypto.
It needs to be pointed out that global factors are also responsible for Bitcoin’s strong showing. Investors who had invested heavily in traditional stocks and metals, including commodities like oil have suffered massively because of COVID 19. The market crashes have forced many people to seek out other investment opportunities.
You can say that Bitcoin’s halving is taking place in a rather monumental time in the world’s economic history. This is making investors feel bullish about getting steady returns, increasing portfolios and diversifying away from tradition.
Trading platforms like primeadvantage.app, which help people buy, sell and exchange cryptocurrencies are seeing many people making investments.
What will be the Global Economic Impact of COVID 19?
One thing is certain- we have seen how fragile our global financial systems are. They have never been able to withstand the impact of emergencies, natural calamities and bureaucratic red tape and corruption. Fiat currencies have again shown us that a global crisis will most definitely lead to a crumbling of financial systems.
The hushed conversations about looking beyond the dollar and working towards a global financial currency is gathering steam. Many are now going back to Satoshi Nakamoto’s White Paper on Bitcoin and making a call to consider it as a foundation for a new financial order.
Given than Bitcoin is by far the most popular crypto in circulation, many will not be surprised to see it rise as a new financial model for the world.
Want more news from the Tech world for Gaming Peripherals to Hardware Click Here
