Is Bitcoin Crazy Game or Its Time Is Yet to Arrive?
The crypto community claims that it makes sense to buy Bitcoins because ordinary money will worth less and less because of all the trillions that central banks pump into the financial system. Is it really so?
In mid-May, despite the impact on the financial market caused by the coronavirus pandemic, there was a very important week for Bitcoin. We’re talking about a new halving when it comes to mining of this cryptocurrency. Bitcoin passed its third halving quite peacefully, so the moment after that, it was worth a little more than 9,000 U.S. dollars.
What does that actually mean? Now it’s harder to mine bitcoins, so their total number is even smaller, meaning the reward is half as small. Miners were rewarded with 6.25 bitcoins for each newly created block (previously 12.5). That is why it’s now more difficult to mine new bitcoins because the supply is limited, which should be reflected in the constantly rising price.
The opposite thing happens with the currencies of individual countries. Many central banks, in an effort to prevent a severe recession, tirelessly print dollars, euros, pounds, yens… The crypto community, therefore, claims that it makes sense to buy Bitcoins because ordinary money will worth less and less because of all the trillions that central banks pump into the financial system.
Are You Suspicious of Bitcoin?
Consequently, sooner or later, there will be a general rise in prices. In this case, Bitcoin would be similar to providing protection against inflation that was once provided by gold, which is why some reputable investors have recently started buying bitcoins.
The huge action of the United States, as well as other governments and central banks around the world, has caused fears of inflation and accumulation of debt out of control. However, investors have turned to dollar security since the corona crisis began.
Bitcoin, as well as other digital currencies whose supply has been programmed to shrink until they reach their maximum, seems like the perfect protection in a world where investors continue to seek the protection of their portfolios from the behavior of world central banks.
If Bitcoin successfully grows into a safe haven and protection against inflation, some analysts see its value accelerating over the next few years, which could raise it to a record high of $ 20,000. This is how you can trade BTC/USD.
As for the consequences of Bitcoin halving, it’s clear that this could arouse renewed interest in such digital money because it’s only a limited number in circulation.
Investing in Bitcoin – Gambling or Not?
The question is will Bitcoin offer a new opportunity for investors to make money given that people are looking for new ways to make money in these challenging times? Bitcoin is only one currency, you can invest in Ethereum, XRP, etc. in addition to it.
Apart from technical things, you also need a little luck – mining bitcoins is like a needle in a haystack. So far, 17 million have been mined, and its mining is becoming increasingly difficult.
Given that Bitcoin more than doubled its prices since the “Black Thursday”, more than three months ago, almost 85 % or 25.79 million addresses with cryptocurrencies are now “in the money”. To remind you, the address is in money (more precisely, in earnings) if the current price of Bitcoin is higher than the price at which the coin was bought or sent to the address.
While 85% of addresses are in the black, 10.8% or 3.28 million addresses are penniless or have purchased coins at an average price higher than the current market price. What remained was 4.1% (1.24 million) and it went to money. This means that the average price they acquired with their bitcoins is around the current market level.
Such a structure may not be good for cryptocurrency in the short term. Since most addresses have already profited, some observers expect sales pressure to emerge soon or after the mining award is halved.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
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