In the last few months, Bitcoin has been in a period of calm and recovery with over 250% price increase - from $4,000 in April to over $10,000 today despite the volatile market. Does this mean that Bitcoin will continue to rise within the last few months of the year? Take a look at how Bitcoin fared recently and the possibilities that might happen with Bitcoin over the next few months.
Digital Assets are Becoming a Mainstream
With the growing interest in digital assets today, Bitcoin will most likely benefit from it. Recently, Facebook, in partnership with large and notable companies such as PayPal, Uber, Visa, and the like, launched Libra, a digital currency that simplifies online transactions.
According to FXTM’s research analyst, Lukman Otunuga, the mainstream acceptance of digital assets, primarily driving the price increase of Bitcoin and Libra, has made Bitcoin more appetizing. But he warned how unpredictable digital assets can be based on the past. Thus, Bitcoin is still under market volatility.
Bitcoin is Turning as a Safe Haven
The on-going trade war between the U.S. and China alongside the disputes with other countries such as Mexico, Iran, and Germany brought investors into panic mode and led them to find ways to diversify their portfolios. And, for them, turning to Bitcoin is a good way to do it.
Based on the statement of Luno’s CEO, Marcus Swanepoel, the uncertainty of the geopolitical situation made Bitcoin as the safe haven for investors since Bitcoin is no way related to centralized assets.
Central Banks’ Liquidity Injection
Both the European Central Bank and Federal Reserve’s commitment to cut purchase assets and interest rates may fuel the demand for Bitcoin and other digital assets. This is because a lower interest rate reduces the cost of borrowing while discouraging saving. With the central banks expanding monetary policies, traders might be expecting the easiness of converting digital assets into cash which can boost Bitcoin’s price.
Halving will Happen Next Year
In May 2020, Bitcoin will have its third strike of halving. Halving means that lesser Bitcoin will be generated. To be more approximate, the number of Bitcoin that will be generated within 10 minutes will reduce by 50 percent. The first two halvings of Bitcoin have successfully boosted its price 10 times.
According to Forbes, the market value of Bitcoin could rise in the coming months due to the halving which is expected next year. Originally, miners get 50 Bitcoin for every new ‘block’ but every four years, their payout is reduced into halves to fight inflation. In May 2020, it is expected that their payout will go down to 6.25 Bitcoins only, which does not justify the computing power and electricity bills that these miners consume. This could lead miners to lose interest in discovering new Bitcoins, thus the inflow of new Bitcoins into the market will reduce which will drive the price of Bitcoin higher.
Whales May Boost Bitcoin’s Price
It is undeniable that a lot of Bitcoins are under the name of early investors. These early investors are very few and they hold chunks of Bitcoins with them which limits the circulation of Bitcoin. As a result, the price of Bitcoin may increase. According to the co-founder of TokenAnalyst, Sid Shekhar, these wealthy Bitcoin holders will not allow Bitcoin to lose value so soon.
Cryptocurrency is Continuously Developing
Right at this very moment, the blockchain technology, including Bitcoin, hasn’t reached its maximum potential yet. As years pass by, the cryptocurrency market is developing and a lot of proposals before are coming to life. Some of these developments include Bitcoin futures and crypto loans, exchanges, coins, ICOs, and wallets among others. Bitcoin alone is developing itself into a better version with different Bitcoin forks, which makes it highly prospective most especially in the coming months and years.
The Bitcoin trends today indicate that Bitcoin is heading towards a greener pasture, but the future is uncertain. Crypto holders, traders, and market savvy investors are increasing and Bitcoin surely keeps up with different industries. Just very recently, Bitcoin spiked over the last weekend following China's stance on embracing the blockchain technology. Will this be the signal that Bitcoin is heading towards a strong position in the next coming months?
