Bitcoin rose 20% today, reaching $ 9,400 at its peak ($ 48,329.78 in Brazil). It is the first time in two months that BTC has exceeded $ 8,000, with halving getting closer every day.
After reaching the peak, within a few hours the price dropped to $ 8,600. “Bitcoin had the same price when I woke up and when I went to sleep, but in the meantime, somewhere, people started to lose their heads. I didn't even know I had hit $ 9400, "said trader Scott Melker.
The increase also caused Coinbase, the largest US exchange, to experience interruptions. The last time Coinbase fell, under such large trading volumes, we saw Bitcoin's biggest bull run.
Bitcoin halving is imminent
Although the rally did not last, experts told Decrypt that it is an indication of renewed interest in Bitcoin and a clear precursor that the next two weeks ahead will be exciting.
"People are getting ready for halving and buying BTC before the offer is cut," Pedro Febrero, an analyst at Quantum Economics, told Decrypt.
Bitcoin's next halving will take place on May 12 and will cut the cryptocurrency mining reward in half – from 12.5 BTC to 6.25 BTC. Traders anticipate that the new scarcity could make Bitcoin more valuable. But unless Bitcoin's price makes it profitable for mining, miners are at risk of operating at a loss and can dump their BTCs in the market to cover their costs.
Like many, Joe DiPasquale, CEO of the BitBull Capital investment fund, considers halving an extremely positive event, based on the history of previous halvings, and believes that market sentiment currently reflects this.
"In the long run, halving the mining reward is an optimistic development, especially since fiat currencies around the world are suffering from inflation, and reducing Bitcoin's supply results in deflation," he said.
George McDonaugh, co-founder of blockchain investment firm KR1 plc, agreed. "Narratives in the blockchain world act like the Force in Star Wars, mysteriously move and shape the market and, in terms of halving, the Force is strong with this one," he concluded.
But this time, unlike previous halvings, investors have the ability to trade Bitcoin derivatives on new exchanges that have a lot of liquidity available, like never before, said McDonaugh. "This could provide a counterweight to a bull run, letting itself go and potentially reducing possible price spikes."
The power of FOMO
And some warned that today's initial rally had no liquidity and was driven by FOMO (Fear of losing the opportunity).
One trader called the bullish movement FOMO, with whales convincing smaller traders to enter the market using the halving narrative.
But Binance co-founder and CEO Changpeng Zhao was more optimistic. At the twitter, he celebrated that the exchange had reached a record high of $ 16 billion in trading volume in the past 24 hours.
This type of FOMO could very well boost cryptocurrency and traditional markets much higher in the coming weeks, argues Nigel Green, founder and executive director of independent financial consultancy DeVere.
"With a recovery underway, they don't want to lose their current market value in the long run, which has the effect of boosting higher markets," he said. "We are witnessing what is likely to become a powerful recovery in global stock markets, as investors expect the second half of 2020 and 2021."
Will Bitcoin reach $ 10,000 before half?
Green believes that Bitcoin will reach at least $ 10,000 ahead of the May event. "The excitement for halving, along with the new era we are in, will drive Bitcoin's price exponentially and sustainably," he said. “In addition, we could see an explosion in the price of Bitcoin due to real-world problems that it fixes and increasing adoption.”
Simon Peters, an analyst at eToro, agreed. “Miners' spending has decreased this week, suggesting that, overall, they are choosing to wait. The number of real market participants is also reaching new highs amid expectations that halving will occur as the latter and increase the price. With that, we believe the price is likely to exceed $ 10,000 before halving actually occurs, ”he said.
But Peter Schiff, a famous bitcoin critic and fan of gold, was not so impressed. "Bitcoin is being offered by speculators, as well as other risky assets today," he tweeted.
Matthew Graham, CEO of investment firm Sino Global Capital said that while he continued to view halving as a “moderately optimistic event”, it was not the same as the previous one. “Short-term movements are much more difficult to predict and, even in a bullish scenario, we can expect major upheavals along the way. Traders should be especially careful with movements accompanied by low price volumes ”, he advised.
And while today's rally failed, data from analytics startup Skew showed that Bitcoin provided has risen 27% since January 1, more than double gold and much better than stocks and oil.
However, Galaxy Digital CEO Mike Novogratz argued that Bitcoin and gold are the only ones we should keep an eye on. He had only two pieces of advice: “Buy gold. Buy BTC, ”he tweeted.
* Translated and republished with authorization from Decrypt.co
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This source of this article is portaldobitcoin.com.