US, WASHINGTON (ORDO NEWS) — On the Bitcoin network, the third halving took place. As a result, the inflation rate of the first cryptocurrency fell by another 50% and reached 900 BTC per day instead of 1,800 BTC, as it was in the last four years. This sharp decline has lead people to say “Bitcoin era is it a scam?” although the answer to this can be obtained via the internet.
Halving is a process when the reward of miners for block mining decreases, that is, the speed of generating tokens slows down, and miners receive half the cryptocurrency. This is such a feature of bitcoin – halving occurs approximately every 4 years. This process is necessary to control cryptocurrency inflation, the amount of which is limited to 21 million tokens. Currently, 18.3 million, or 87% of the total possible number of bitcoins, have been mined.
During the first slowdown in block generation in 2012, bitcoin was worth $ 12, during the second halving in 2016, the price of the first cryptocurrency was $ 650. Now the cost of one bitcoin is about $ 8700.
As bitcoin generation is halved and demand remains the same, the price should rise. However, the third halving of Bitcoin previously caused an ambiguous reaction of the crypto community. The frenzy around digital currencies once led Bitcoin to a value of almost $ 20,000, while the coin is still trading about 50% below the 2017 record. The average rally time after halving was 446 days: if the story repeats itself, Bitcoin may peak in the region of August 2021.
However, the first cryptocurrency fell in price over the weekend by about 13% to $ 8675. At the auction in New York on Monday, at 10 am, bitcoin recovered to the level of $ 8840.
Halving will affect Bitcoin miners: it is assumed that if the rate drops, some miners will not be able to take part in cryptocurrency mining due to a decrease in the size of the awards, and, therefore, the inability to compensate for the costs of mining. Experts believe that these miners will never return, unless they upgrade their equipment or find sources of extremely cheap electricity.
“Older devices will no longer be profitable unless they mine on almost free electricity or the price doubles,” said Alejandro de la Torre, vice president of Pool In pool.
Regarding the price of cryptocurrencies, long-term forecasts vary. Skeptics believe that after lowering the rewards, miners will be forced to liquidate their stocks and a wave of sales will begin, which will pull the course down. In previous times, such declines were not continuous and were replaced by the achievement of new price highs.
However, Bitcoin has grown by almost 25% this year and among its new fans there is well-known macro-investor Paul Tudor Jones, who said he is buying Bitcoin as a hedge against inflation, which, as he sees it, comes from the central printing press banks. A billionaire with an estimated fortune of $ 5.1 billion holds 1-2% of his assets in bitcoin.
Bitcoin has not stood the test of time, Jones said in an interview with CNBC, but as part of the overall digitalization of the world, bitcoin is clearly a useful technology. The expert sees an expanding cryptocurrency user base, which is considered a hallmark of every bull market, and everyone who buys Bitcoin is betting that the ecosystem of the first cryptocurrency will continue to expand.
Bitcoin price decreased over the past day by 1.1%. The market capitalization amounted to $ 161.10 billion. At the time of publication, bitcoin was quoted at $ 8766 per coin.
The cryptocurrency market at the time of writing is in an uptrend. The total capitalization of the cryptocurrency market at the moment has reached $ 240.73 billion, according to Coinmarketcap. Bitcoin Dominance Index is 66.9103%
Alternative tokens are showing growth. So, Ethereum grew by 0.5%. Market capitalization amounted to $ 21 billion, the cost of one token is $ 189. Ripple cryptocurrency rose 0.2% to $ 0.20 per XRP token. Slightly increased Tether, Bitcoin Cash, Bitcoin SV, Litecoin, etc.
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