There are a lot of different perceptions and predictions out there about Bitcoin's rising price this year. Yesterday Tom Lee of Fundstrat Global Advisors said the upgrade to Bitcoin will start this year. This was a turning point towards Bitcoin's revival in the months and years to come. Alternatively, the Bitcoin Halving Day concept is seen as a “crazy” way to raise Bitcoin. In these two cases, many people suddenly become psychics, fortune tellers of the future.
Lee said the Year of Adoption was based on a number of technical, macro and fundamental analyses. Lee's talk in mainstream media in the United States is not the only time this has happened. Previous predictions were wrong several times. Macro, Lee told CNBC, the performance of the US dollar is quite good there in 2021. The adoption of Bitcoin by institutions he also sees an impact on the crypto asset ecosystem, namely Fidelity Investment's decision to launch Bitcoin trading and store services through its subsidiary, Fidelity Digital Assets.
Intercontinental Exchange is doing the same, the largest managing company of the New York Stock Exchange, through the Bakkt platform. These three aspects are seen as big drivers of adoption, including the super inflation that has occurred in Venezuela. The complicated financial situation encourages poor countries to adopt crypto assets.
Halving Day Party The term Halving Day is actually not new and not only in Bitcoin, but is applied to a number of crypto assets that hold a Proof-of-Work (PoW) consensus algorithm. Following the historical pattern of Bitcoin's rise in the past, indeed after or before the Halving Day, the price of Bitcoin rose high. The third Halving Day is expected to fall in May 2022. Currently, the Bitcoin price is trading at around US$3,900. The highest level will be reached by Bitcoin if we follow a cycle known as Halving Day, where the reward per block will decrease by half every 4 years or every 210,000 blocks. This reduction will have an impact on the overall availability of Bitcoin, making Bitcoin potentially more expensive, as it allows demand to outpace supply in a rapidly increasing market.
This reduction in reward per block is a standard condition in the blockchain system to reduce the rate of price inflation. The system developed by Satoshi Nakamoto indeed simulates the gold production process and emphasizes our natural characteristics, namely: demand and supply. When an item is scarce, because it is in limited supply and is in great demand, its price will rise. The number of Bitcoins is limited to a maximum of only 21 million units. As of March 15, 2019, there were around 17,589,650 units in circulation.
So, will the third Halving Day, which is expected to fall in May 2022, repeat the history of the increase in the previous two Halving Days? Yes, we know, herein lies our turmoil and anxiety. Between believe and not believe. We'll be covering them in a few brief scenarios soon. But for sure, on the next Halving Day, the number of new Bitcoins every 10 minutes decreased from 12.5 BTC to 6.25. Remember, Bitcoin is getting rarer, not as much as currently circulating and will be hard to get.
