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What is the Halvening? (Hint: It’s a BIG deal)

For crypto enthusiasts, the Bitcoin “halving” is a big deal. There are countdown clocks and endless predictions and analyses, all leading up to a critically pivotal event for Bitcoin. While the “halving” has an ominous tone, it’s actually a rare event in the cryptocurrency world. So, what is the halving? And why is it so […]

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For crypto enthusiasts, the Bitcoin “halving” is a big deal. There are countdown clocks and endless predictions and analyses, all leading up to a critically pivotal event for Bitcoin. While the “halving” has an ominous tone, it’s actually a rare event in the cryptocurrency world. So, what is the halving? And why is it so important?

The halving cuts production of Bitcoin in half

Part of Bitcoin’s brilliance is the system in which Bitcoins are released into the market. A block is produced approximately every 10 minutes, awarding a specific number of bitcoins. At its origin, one block produced 50 Bitcoins.
This system changes after every 210,000 blocks is released. Approximately, this comes out to every four years. After each set of 210,000 blocks, the number of bitcoins awarded in one block is cut in half—or, the halving.

Halving production slows the rate of inflation

This halving slows the rate of inflation of Bitcoin. And in 2020, Bitcoin’s inflation rate will fall to 1.8%—below that of the U.S. dollar.

The halving event, occurring on a regular, predictable schedule, removes a lot of uncertainty that plagues the traditional market. At the same time, it creates more scarcity over time. As demand continues to increase, supply continues to decrease. While these values will remain constant and predictable, it’s worth noting that the supply of the U.S. dollar has nearly tripled in the last 20 years.

Bitcoin was built by its mysterious creator, Satoshi Nakamoto, in part as a rebuke to the role governments and financial institutions play in controlling the value of their currency. It is believed that Satoshi Nakamoto is a staunch libertarian, and that Bitcoin was perhaps created as a response to the 2008 financial crisis.

In a state-issued currency, supply can vary with the economy. For example, the U.S. Federal Reserve can add or remove dollars from circulation on an as-needed basis to respond to economic indicators. This can cause frequent inflation and deflation of the value of the dollar.

However, Bitcoin not only has this schedule set, but there will only ever be 21 million Bitcoins in existence. Once the last one enters the market, there will be no more. Because there is a limited supply, a Bitcoin is more like a gold bar than a dollar bill.

Gold, for example, has defended itself as an international store of value and medium of exchange for over 6,000 years. However, unlike gold, Bitcoin can be exchanged effortlessly and doesn’t impose much of a physical burden to transport or store.

Anyone can do the math: Slow inflation rate + predictable schedule + limited supply = a winning combination.

The history of Bitcoin’s halvings

Based on the halving schedule set forth at the beginning of Bitcoin, these events have occurred approximately every four years:

  • 2009: Blocks 1-210,000 received 50 BTC
  • November 8, 2012: Blocks 210,001-420,000 received 25 BTC
  • July 9, 2016: Block 420,001-630,000 received 6.25 BTC
  • May 12, 2020: Blocks 630,001-740,000 will receive 6.25 BTC
  • 2024: Blocks 740,001-950,000 will receive 3.125 BTC
  • ~2140: All 21 million bitcoins will enter into the market

 

Historically, the halving triggers a bull run

Historically, the halving event has triggered a bull run—it reduces supply. And as you can see in the previous halvings, they have each preceded a meteoric rise in price. However, it’s important to note that this increase is merely a correlation, and we are not 100% certain that these increases are a direct result of the halvings.

Additionally, these major increases did not occur overnight. The dramatic price increases occurred over the course of several months following the halving. While this historical data is important as you determine your own investment decisions, keep in mind that each halving event will be different.

Bitcoin continues to grow in popularity, and in the last few years, it has become a household name. As these events gain more widespread media coverage, the perception of Bitcoin’s value and its recognition will continue to change rapidly.

This type of awareness and media coverage alters analysts’ predictions. Because a large spike will be anticipated following a halving, this could lead to major increases in purchases just before the halving occurs—this could spell different results than the previous events have yielded.

The future of halvings

In 2009, Bitcoin essentially existed within the confines of an esoteric community of programmers and innovators. In 2012, Bitcoin started to gather enough users to make transacting a somewhat viable option. In 2016, Bitcoin was still steadily growing, but far from its popularity today.

Today, Bitcoin has already experienced enough bull and bear markets, massive trading spikes, international regulatory attention, and media coverage to make the 2020 halving a major point of focus.

As Bitcoin marches, slow and steady, toward its destination of releasing all 21 million bitcoins into the market around the year 2040, each halving will have significant consequences for the value of Bitcoin. And with each event, we will gain a deeper understanding of the true penetration of Bitcoin as a digital currency and its value in the market.

The post What is the Halvening? (Hint: It’s a BIG deal) appeared first on Bitcoin IRA | Official Bitcoin Retirement Account Investment.

Source: https://bitcoinira.com/articles/what-is-the-halvening-hint-its-a-big-deal

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ETH Cools Off After 13% Weekly Gains, What’s Next? (Ethereum Price Analysis)

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ETH/USD – Bulls Retest Bearish .618 Fib Resistance

Key Support Levels: $410, $400, $387.
Key Resistance Levels: $416, $421, $439.

Ethereum saw a strong 13% price surge this past week as it reached as high as $421 (1.414 Fib Extension). More specifically, the buyers could not close a daily candle above the resistance at the bearish .618 Fib Retracement at $416.

After heading back into $400 yesterday, the bulls have rebounded and are now retesting the aforementioned level.

ethusd-oct24
ETH/USD Daily Chart. Source: TradingView

ETH-USD Short Term Price Prediction

Looking ahead, once the buyers break $416, the first level of resistance lies at $421.50 (1.414 Fib Extension). This is followed by resistance at $434, $439 (August 2018 Highs), and $445 (bearish .786 Fib). $450, added resistance lies at $462 and $475.

On the other side, the first level of support lies at $410. Beneath this, support is found at $400, $387 (.382 Fib), and $377 (.5 Fib).

The RSI is approaching overbought conditions but still has room to push higher before becoming truly overbought.

ETH/BTC – Bulls Testing 100-days EMA Resistance

Key Support Levels: 0.0311 BTC, 0.0305 BTC, 0.03 BTC.
Key Resistance Levels: 0.0327 BTC, 0.0337 BTC, 0.0341 BTC.

Against Bitcoin, Ethereum struggled this week as it dropped as low as 0.0305 BTC. It has since bounced higher to climb back above 0.031 BTC to trade at the current 0.0318 BTC level. It is now testing resistance at a 100-days EMA and must overcome this to head back toward the October highs at 0.0337 BTC.

ethbtc-oct24
ETH/BTC Daily Chart. Source: TradingView

ETH-BTC Short Term Price Prediction

Looking ahead, if the bulls can break the 100-days EMA, the first level of resistance lies at 0.0327 BTC (bearish .236 Fib Retracement). This is followed by resistance at 0.0337 BTC (March 2019 Support – now resistance), 0.0341 BTC (bearish .382 Fib), and 0.035 BTC.

On the other side, the first level of support lies at 0.0311 BTC (.618 Fib). Beneath this, support lies at 0.0305 BTC, 0.03 BTC, and 0.0295 BTC (200-days EMA).

The Stochastic RSI recently rebounded, which put an end to the downward pressure. For a bullish recovery above the 100-days EMA, the RSI must pass the mid-line to indicate bullish momentum within the market.

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Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.

Cryptocurrency charts by TradingView.


Source: https://cryptopotato.com/eth-cools-off-after-13-weekly-gains-whats-next-ethereum-price-analysis/

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Binance Bitcoin Futures Markets Clock Highest 24h Volumes as Institutions Go Long

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With bitcoin’s latest rally beyond the $13,000 mark, it seems like the next bull market is here. It can be seen from BTC markets that have been on fire for the last 7 days, including derivatives. The latest data shows that bitcoin futures markets on Binance have clocked the highest 24h BTC futures volumes amongst all platforms. This comes amid the exchange registering $760 million in open interest.

Binance Experiences Explosive Bitcoin Futures Market Action

Bitcoin rallied beyond $13,000, galvanizing every BTC related market along the way, including the futures market on Binance.

As per the latest data from crypto market analytics firm Skew, the exchange logged the highest 24h bitcoin futures volume amongst all BTC derivative trading platforms.

skew_exchange_24h_btc_futures_volumes_bn
Binance Clocks Highest 24h Bitcoin Futures Volume, Source: Skew

This is coming after the Malta-based cryptocurrency exchange registered heavy futures trading traffic as open interest (OI) jumped 30 percent to $150 million in just 2 days from October 19 to October 21. Binance’s current OI figure stands at $760 million.

Skew’s data also shows that Binance hosted the highest aggregated daily bitcoin futures volumes on October 21. The cumulative figure was $32 billion that day, out of which Binance’s share was $8.3 billion. But at $3.3 billion, Binance still has the highest aggregated futures volumes.

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BTC Futures Market Metrics On Other Platforms Are Booming As Well

With bitcoin’s recent week-long upside correction, traders using other platforms are mainly interested in BTC futures. Skew’s observations from October 20 show that there has been a 54 percent appreciation in 24h Futures and Swap Volumes on Huobi.

Compared to bitcoin, only ether (ETH) has experienced a 30 percent surge in volumes. And that’s not all. Bitcoin futures open interest on institutional platform CME rose to $784 million today. This has added nearly 1500 contracts to the already bubbling CME BTC futures roster, scheduled for expiry by the end of this month.

But how are these futures traders on CME actually betting on bitcoin?

Institutions Are Going Long While Hedge Funds Are Busy Shorting

Skew did a deep inspection of the above spike of bitcoin futures open interest on the CME, and the firm concluded that bets are mainly coming from institutions and hedge funds. The former is more optimistic about bitcoin price rallying further in the near term, as opposed to hedge funds who have record short bets on BTC. The same is visible from the Commitment of Trader (COT) numbers displayed in the chart below:

Amidst all the above-market activity, the aggregated open interest for bitcoin futures for all platforms sharply rose to $5 billion and has since remained the same.

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Source: https://cryptopotato.com/binance-bitcoin-futures-markets-clock-highest-24h-volumes-as-institutions-go-long/

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Bitcoin Price Could Triple Even After a Modest Switch From Gold, JP Morgan Says

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Despite having a complicated past, it seems that JP Morgan’s love for Bitcoin is growing every day thanks to its potential as an investment and store of value.

In a recent report, the American bank shared with its investors an analysis of Bitcoin’s current situation and possible future scenarios regarding prices and fundamental value. The bank explained that under the current conditions, Bitcoin has a good chance of increasing its price.

JP Morgan Believes Bitcoin Could be an Alternative to Gold

JP Morgan believes that investors could switch from gold to bitcoin as a way to diversify their portfolio and having another uncorrelated storage of value. This is especially important for those who don’t want to depend exclusively on gold when it comes to diversify their risk exposure:

“Even a modest crowding out of gold as an ‘alternative’ currency over the longer term would imply doubling or tripling of the bitcoin price.

The report also adds that adoption is key to increasing Bitcoin’s perceived utility, and therefore, its price. They explain that it is necessary to observe a more significant number of “economic agents” accepting cryptocurrencies as a means of payment in order to talk about a historical price appreciation scenario.

This is not far from reality. In fact, bitcoin is increasing acceptance by large economic agents (which seems to prove JP Morgan’s thesis). The recent rise in prices from $10,500 to the current $13,110 began after the payment processor Square announced a $50 million investment in Bitcoin.

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PayPal’s announcement to support the purchase and sale of cryptocurrency -BTC, ETH, BCH, and LTC for now- also further catalyzed the crypto markets’ bullish sentiment.

A Generational Thing

JP Morgan also assures that Bitcoin’s acceptance within the global financial culture goes through a cultural or generational context. As boomers leave the market and millennials take a more prominent position, Bitcoin and other digital tokens become more relevant in the investment world.

“The potential long-term upside for bitcoin is considerable as it competes more intensely with gold as an ‘alternative’ currency we believe, given that Millenials would become over time a more important component of investors’ universe.”

However, this assertion must be taken with a pinch of salt since studies reveal that Gen Z -the Millenials’ offspring- are not as enthusiastic about the use of crypto, opting for alternatives involving the digitalization of fiat money.

Jp Morgan believes Bitcoin could be largely adopted, but GenZers think otherwise
Gen Zers are not really into Bitcoin. Image: Business Insider

JP Morgan’s statements show the bank’s ability to adapt to new market trends, which is also characteristic of PayPal. Just two years ago, the bank’s CEO said Bitcoin was “worse than tulip bulbs” while PayPal’s CEO referred to Bitcoin in the same way:

“Bitcoin is the greatest scam in history. It’s a colossal pump-and-dump scheme, the likes of which the world has never seen.

Bitcoin is having a good time, with many models anticipating potential upward behavior over the next few months. The most controversial and discussed one, the stock-to-flow model, predicts that Bitcoin could reach $1 million by around 2026.

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Source: https://cryptopotato.com/bitcoin-could-double-triple-price-gold-market-jp-morgan/

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