The historic 2020 Bitcoin halving event that took place on Monday underlines that the long-term future of cryptocurrencies is secure.
Occurring every four years, this year’s highly anticipated event saw the number of new Bitcoins issued every 10 minutes fall from 12.5 to 6.25, with the halving happening on block 630,000.
The halving event showed us that the long-term future of digital currencies is safe for two key reasons.
First, the price of Bitcoin had been gradually increasing ahead of this year’s halving. Indeed, over the last three months it rose almost three-fold. The price then dropped back just before and after the event.
This highlights the burgeoning retail demand for Bitcoin as investors further recognise and understand the growing influence and immense opportunities of digital currencies in an increasingly technology-fuelled world.
Taking this into consideration, major crypto investors, referred to as ‘whales’, amass crypto at far lower prices, then initiate a sell-off to capitalise on the prolonged growth in demand.
Second, looking at previous Bitcoin halving events, we’ve seen that after the post-halving price drop, there follows a bull run.
There have been remarkable price hikes in past halving events. Bitcoin’s value rose 300% following the 2016 event.
As such, it’s likely that this time around the market will respond with an even longer-term upward trajectory.
The impending rally could be even more radical this time around as there is more recognition and awareness of the long-term use of crypto now than ever before.
Moreover, during these unprecedented times, central banks around the world have increased monetary supply, which will push the prices of cryptocurrencies even higher.
Large scale quantitative easing leads to currency devaluation and inflation fears, which we’ve seen in the U.S. recently with the central bank adding trillions of dollars to the monetary supply.
Consequently, these measures will undoubtedly lead to a higher number of investors contemplating decentralised, non-sovereign cryptocurrencies.
Looking past the 2020 halving event, digital currencies are regarded as the future of money more than ever before, predominantly because of mass adoption and the real-world issues they tackle.
Nigel Green is founder and CEO of deVere Group. One of the world’s largest independent financial advisory organizations, de Vere does business in 100 countries and has more than $12 billion under advisement.
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