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Bitcoin has shown great progress in terms of its pricing. BTC price went up by almost 115 percent. Previously the crypto giant traded at $3,742 for each coin. But now, the figures elevates up to $8,000 level. Is $20k the target?
Around every four years, the Bitcoin blockchain network encounters a block reward halving, a mechanism that reduces the rate in which new bitcoin is generated or mined by miners. The block reward halving was used as an explanation factor behind the dominant cryptocurrency’s major rallies.
Price one year before first halvening : $2.55
Price one year after first halvening : $1,037
Price one year before second halvening : $268
Price one year after second halvening : $2,525
Price one year before the third halvening: $7,100
Price one year after the third halvening:
— The Rhythm Trader (@Rhythmtrader) May 17, 2019
The truth is, Bitcoin price is on its way of having its second-best quarter since 2014, with a 92 percent gain within two months if it remains above $8,000 by the end of June.
Since April 1, the Bitcoin price has increased from $4,100 to $8,000, by nearly two-fold against the U.S. dollar.
current quarter ranks as the 2nd highest quarterly gain since 2014 and the 7th highest quarterly gain all-time pic.twitter.com/bNTohKJREw
— Josh Olszewicz (@CarpeNoctom) May 19, 2019
At its lowest point in December 2018, Bitcoin was down about 85 percent from its all-time high at $20,000. As of May 20, bitcoin is down less than 60 percent from its record high following a powerful recovery in the second quarter of 2019.
In spite of facing increased downwards pressure last week that temporarily put Bitcoin’s upwards momentum in danger, the cryptocurrency continued surging upwards and, at the time of writing was around $7,900, which is the point at which BTC incurred significant selling pressure a few days ago.
Some analysts believe that Bitcoin could indeed surge towards $10,000 in the near future, which would be a significant technical movement for the cryptocurrency.
Analyst and investor Joseph Young said that BTC’s rapid recovery towards $8,000, despite the recent pull back, is a testament to the positive market sentiment.
“Bitcoin dropped to $6,400 on May 17 triggered by a 5,000 BTC sell order on Bitstamp that led to massive BitMEX liquidations. Rapid recovery to $8,000 is a testament to how positive the sentiment around the market is currently.”
JPMorgan Recognizes Bitcoin’s Intrinsic Value
Even JPMorgan seems to (finally) recognize Bitcoin “having intrinsic value”. Recent research note from JP Morgan, obtained by a German economist and author, Holger Zschaepitz , claims that BTC is currently trading above its “intrinsic value.”
This note is suggesting that BTC’s intrinsic value is the estimated cost of production per unit or mining costs.
Zschaepitz said that JP Morgan notes that this current rally “carries echoes of late-2017”.
— Holger Zschaepitz (@Schuldensuehner) May 17, 2019
Bloomberg’s Tracy Alloway also tweeted:
Bitcoin diverging from JPMorgan's measure of 'intrinsic value' (basically a measure of marginal cost of production – electricity prices, hash rates, etc.) pic.twitter.com/vvkUgC0Fjp
— Tracy Alloway (@tracyalloway) May 19, 2019
Zschaepitz noted that a significant price divergence to the upside happened at the end of 2017, as the bull run began to take hold of the market. JP Morgan has been usually bearish on BTC, and it’s also important to recall that JP Morgan’s chief executive Jamie Dimon has called BTC a fraud and more insults more than once.
Charlie Shrem: I Was Bitcoin’s Wild Child
Be it as it may, the truth is that over the last decade, you could have made a five million percent profit by investing in cryptocurrency. Or you could have lost everything. Charlie Shrem was called “crypto wild child” but he experienced highs and lows and even got arrested.
CBS’s Anderson Cooper interviewed Shrem who had, by his own words, “crashed really hard”. If you don’t know who this is, may we remind you of his first startup company BitInstant that he found back in 2011 and by 2012 after Roger Ver invested $125k, came the Winklevoss brothers who became major investors with $1,5 million. By 2013, BitInstant was processing approximately 30% of all Bitcoin transactions and Shrem was pronounced one of Bitcoin’s first millionaires. Estimates of his net worth ranged from a few million dollars to 45 million.
Because of the drug connected BTC trading through the “Silk Road”, Shrem was arrested, but that didn’t stop the market price of Bitcoin from rising from about $250 when Charlie went to prison in 2015 to nearly 20,000 dollars at the end of 2017. It then plunged 84% before climbing back last week.
Analyst David Cox commented:
“Bitcoin can cross the 20,000 USD mark by the end of this year and can be expected to grow as high as 50,000 USD in the next 2 years. This is the best time to invest in Bitcoin as the prices are going to go up steeply very soon.”