Why is the market value of bitcoin skyrocketing?
As of December 2020, bitcoin has surged by 500% in the past year. Bitcoin broke many records this year. It recorded an all-time in April 2021 by touching $65,000, and by the end of November 2021, it was $68,000.
The trust in Bitcoin varies from person to person. Some people still consider Bitcoin a Ponzi scheme, whereas others have high hopes for its potential. Undeniably the cryptocurrency market has matured over the past few years, but the extent of volatility has skyrocketed in this market.
As a result, unauthentic and rug pull projects are on a roll these days. You can check weed profit system for more details about cryptocurrency trading, but for now here are some of the reasons why Bitcoin is exceedingly bullish.
Cryptocurrency has become a valuable asset
The rate of inflation in cryptocurrency and lessened opportunities to purchase goods and services using it as a payment method is making it a robust store of valuable assets.
The halving of cryptocurrency, especially Bitcoin, is bumping the scarcity of Bitcoin to the next level. An incline in scarcity favours the store value of the characters of Bitcoin. And with Bitcoin value rising, institutional adoption of this virtual currency is increasing. The rate at which the cryptocurrency market has matured in just 10 years is commendable. Let’s find out some reasons why the market value of bitcoin is rising.
The halving of Bitcoin
We all know miners increase the circulation of Bitcoin currency by releasing freshly minted BTCs in the market. If you don’t know who miners are, these individuals or entities perform an auditor’s job over a cryptocurrency network. Bitcoin comes up with a definite supply limit of only 21 million BTCs. However, as per reports, the number of BTCs present in the marketplace is 18 million.
Cryptocurrency halving is an essential phase of the Bitcoin network. Halving is crucially responsible for bumping the market value of Bitcoin. With Bitcoin halving lessening the actual supply of BTCs, the scarcity of Bitcoin is consistently rising.
The scarcity of any investment asset can lead to a skyrocketing market value. Undeniably, scarcity increasing the market value of an investment asset is not necessary. Sometimes, it decreases the liquidity and ultimately lowers the market value and makes the asset more volatile. Let’s discuss the timeline of cryptocurrency halving over the past few years.
Bitcoin halved in 2012
The Bitcoin network initiated its first-ever bitcoin halving in 2012. As per the rules, a Bitcoin network imposes the bitcoin halving once the auditors form 210,000 blocks on the blockchain. Miners completed the first-ever batch of 210,000 blocks in 2012 when the first halving took place. The subsequent foremost halving event, the price of bitcoin jumped by $1,000.
Before halving, a BTC was trading at $12, and after halving, it was trading at $1,050. After completing the 210,000 blocks batch on the blockchain of Bitcoin, the market value of Bitcoin halted the $20,000 milestone. However, after this sudden surge, China announced a crackdown on cryptocurrencies, and it slumped the entire market of this virtual coin. Recent Bitcoin halving has also shown its magic as now bitcoin reached $68,000.
People remember only a few names holding bitcoin when it comes to institutional adoption. But in actuality, the number of companies that holds Bitcoin units exceeds a thousand. Some famous names are Microstrategy, Tesla motors and galaxy trading. Besides these large organizations, Bitcoin whales can also exert a tremendous impact on the digital currency marketplace.
Maturity demonstrates that how much cryptocurrency has evolved in the last few years. Earlier the market value of cryptocurrencies used to fluctuate dramatically in just seconds. But now, each cryptocurrency has a floor price. For example, bitcoin has a floor price of $25,000, and either has a floor price of $2,000.
Floor price means no matter what happens, the market value of these virtual coins will not slump below this price range. Maturity in the cryptocurrency market also means that accessibility and convenience to trade and mine digital coins are also very high. Trading cryptocurrency is now possible 24/7, and you don’t need to retain a copy of the blockchain in your device. The cryptocurrency industry’s forthcoming years are crucial, but people are pretty optimistic about it.