- Bitcoin Halving: Nigeria, Others Get Ready For Uncertain Bitcoin Future
Nigerians and other global investors in the cryptocurrency market are getting ready for Bitcoin Halving on May 12, 2020.
Cryptocurrency’s most dominant coin, Bitcoin, would experience a historical transformation from supply end for the third time this month. The process known as Bitcoin Halving would impact the number of Bitcoin supplied into the block every 10 minutes.
Bitcoin Halving is a process where the number of Bitcoin earned by miners, known as a block reward, is halved.
The process that began in 2009 started with 50 coins mined every 10 minutes. This was halved twice to current 12.5 bitcoins mined every 10 minutes. According to a document released by Satoshi Nakamoto, who may be an individual or a group that created the digital coin, the process will end with total coins of 21 million around the year 2140.
Why is Bitcoin Halving Important?
Unlike the Central Banks, Bitcoin is not manually regulated rather its algorithm has been engineered to gradually reduce the number of Bitcoins that can be created over time.
Therefore, while the supply of Bitcoin will continue to reduce, its demand will remain constant. A process that if eventually worked could see the digital currency hitting $50,000 a coin or even $1 million as more money would be chasing fewer coins.
This is different from central banks’ approach where money in circulation can be increased or reduced depending on the economic situation.
“Unlike most national currencies we’re familiar with like dollars or euros, bitcoin was designed with a fixed supply and predictable inflation schedule. There will only ever be 21 million bitcoins. This predetermined number makes them scarce, and it’s this scarcity alongside their utility that largely influences their market value,” Blockchain.com, a crypto wallet company, stated in a post.
Advantage of Bitcoin Halving
Bitcoin was trading at $2.01 a coin in 2012 before block reward was first halved to 25 Bitcoins from 50 Bitcoins, the price per coin rose to $664 a coin by 2016 due to the scarcity created by the halving as miners are the only one that can earn the coin every 10 minutes for creating additional blocks needed to strengthen the security of the blockchain.
In 2016, when the block reward was halved again to 12.5 Bitcoins, the price of the cryptocurrency rose to $20,000 in 2017 before plunging to as low as $2,800 a coin 2019 and $3,800 in early March 2020.
Therefore, some Bitcoin experts and investors are predicting that additional reduction in the supply of Bitcoin would bolster the price of the digital currency going forward while others have said the fundamentals have changed that Bitcoin Halving has been priced into the current level as the process is now pretty known by investors.
Still, at Investors King we believed a reduction in supply would positively impact the price of the dominant cryptocurrency but not immediately given the current global health crisis. Therefore, halving may benefit long-term investors more than short term traders as we doubt the market would receive enough funds in the near-term given present surge in global risk and uncertainty.
Implications of Bitcoin Halving
Halvings happened every four years or after every 210,000 blocks. These blocks helped strengthen the cryptocurrency blockchain, improve its security and bolster the confidence of investors holding the unregulated digital currency as an investment vehicle.
However, the continuous reduction in block rewards may result in fewer investments in mining given the amount involved in its set up. Also, considering the rate at which new blocks are created or expected to be created to further strengthen the Bitcoin blockchain, a decline may render it vulnerable to attacks and gradually expose the unproven or untested blockchain to hackers.
“The more computing power miners direct towards Bitcoin, the harder it is to attack because an attacker would need to have a significant portion of this processing power, known as the hashrate, to execute such an attack, stated by Coindesk.
“The more money they can earn by way of block rewards, the more mining power goes to Bitcoin, and thus the more protected the network is.”
On May 12, 2020, the global cryptocurrency investors and traders expect block reward to be halved again to 6.25 Bitcoin.
Bitcoin Breaks $40,000 Price Levels Amidst Optimism and Regulatory Developments
Bitcoin on Monday broke $40,000 resistance levels following a 2.9% surge in price to $40,867 per coin.
The world’s largest digital currency has now appreciated by 146% in 2023 as more institutional investors continue to increase their investments in the unregulated cryptocurrency space.
Investors are exhibiting growing confidence in the Federal Reserve’s apparent conclusion of rate hikes amid a cooling inflation backdrop.
This shift in sentiment has redirected attention to the anticipated extent of rate cuts in the coming year, prompting a rally across global markets.
The cryptocurrency industry is currently in anticipation as regulatory decisions, particularly regarding applications for the first US spot Bitcoin exchange-traded funds (ETFs), hang in the balance.
Bloomberg Intelligence anticipates the approval of a batch of these ETFs by the Securities & Exchange Commission (SEC) by January.
“Bitcoin continues to be supported by optimism around SEC approval for an ETF and Fed rate cuts in 2024,” noted Tony Sycamore, a market analyst at IG Australia Pty.
Technical analysis points to $42,330 as the next significant level to monitor in Bitcoin’s upward trajectory.
Despite recent crackdowns in the industry, including legal actions against figures like Sam Bankman-Fried and Binance, Bitcoin has proven resilient.
Optimists argue that these regulatory measures, alongside the potential approval of ETFs, signify the maturation of the crypto industry and the prospect of a broader investor base.
According to Su Yen Chia, co-founder of the Asia Crypto Alliance, recent enforcement actions “have instilled confidence among investors,” noting that Bitcoin is aligning with momentum in traditional finance as expectations of Fed rate hikes fade.
MicroStrategy Chairman Michael Saylor Bolsters Bitcoin Bet with $593.3 Million Purchase
Michael Saylor, chairman and co-founder of MicroStrategy Inc., has intensified his commitment to Bitcoin with a substantial investment of $593.3 million, expanding the enterprise-software company’s cryptocurrency holdings.
In a filing on Thursday, MicroStrategy revealed the acquisition of 16,130 Bitcoins in November, elevating its total holdings to approximately $6.5 billion.
This move represents Saylor’s most significant purchase since the acquisition of 19,452 Bitcoins for just over $1 billion in February 2021.
Saylor initiated MicroStrategy’s Bitcoin investments in 2020 and has accelerated these efforts throughout 2023, aligning the company with the cryptocurrency’s resurgence after a challenging period marked by rising interest rates and notable crypto-related incidents.
Stepping down from the CEO position a year ago, Saylor emphasized his focus on advancing MicroStrategy’s dual strategy with a primary emphasis on Bitcoin.
MicroStrategy’s stock has witnessed a remarkable 250% surge this year, surpassing Bitcoin’s 125% rally.
The optimism stems from the anticipation of potential approval for a Bitcoin exchange-traded fund (ETF) in the United States.
Contrary to concerns that an ETF approval might diminish demand for MicroStrategy’s stock, analysts like Matthew J. Maley, Chief Market Strategist at Miller Tabak + Co., suggest that an ETF could enhance interest in the asset class without significant cannibalization.
In conjunction with its Bitcoin investment, MicroStrategy entered into an agreement with Cowen and Company, Canaccord Genuity, and BTIG to offer up to $750 million of common stock.
The initial announcement of this stock offering in August outlined intentions to utilize the proceeds for Bitcoin purchases, working capital, and debt repurchases.
Coinbase’s November Surge Sparks Investor Enthusiasm Amid Crypto Volatility
Coinbase Global Inc. has witnessed a 62% surge in its shares this month, capturing the attention of investors amidst the current volatility in the cryptocurrency landscape.
While FTX’s Sam Bankman-Fried faces a fraud conviction, and Binance navigates regulatory scrutiny, traders are flocking to Coinbase, betting on increased business, especially if authorities greenlight Bitcoin-focused exchange-traded funds (ETFs).
This surge, adding $12 billion to Coinbase’s market value in November alone, marks a significant turnaround for the largest US crypto exchange.
The stock has more than tripled in 2023, defying the broader market trends and eclipsing the average analyst price target of approximately $84.
“Coinbase is in a better position today than really any other point as a public company,” notes Needham & Co. analyst John Todaro.
He sees 2022 and 2023 as pivotal years, weeding out weaker players in the industry. “Those who survived are going to come out of that stronger. And Coinbase is one that survived.”
The optimism surrounding Coinbase is fueled by regulatory clarity and the potential approval of US-listed Bitcoin ETFs, expected as early as January, according to Bloomberg Intelligence. Bitcoin’s nearly 130% surge in 2023 adds to this positive outlook.
Investors who bet against Coinbase shares have faced losses of $1.3 billion in the past 30 days, as the company overcame losses reported for seven consecutive quarters.
While competitors face legal challenges, the resolution of Binance’s dispute with the US Department of Justice is seen as a positive for Coinbase.
“A healthy development for the industry is positive for Coinbase, and an abrupt exit of large players is not,” highlights Oppenheimer & Co. analyst Owen Lau. The settlement with Binance is expected to uphold higher compliance standards for crypto exchanges.
Despite this surge, maintaining momentum remains uncertain, with over 40% of Wall Street analysts holding a hold-equivalent rating for Coinbase.
Notably, Cathie Wood’s Ark Investment Management LLC, although reducing its Coinbase holdings, remains the fourth-largest shareholder, emphasizing a cautiously optimistic stance in the crypto space.
Federal Government to Earn Over $500 Million in INTELS Deal
Nigeria Eyes Oil Production Surpassing OPEC Quota Amidst Positive Projections and Global Collaborations
Oil Prices Face Downward Pressure Amid OPEC+ Uncertainty and Middle East Tensions
Finance4 weeks ago
Black Market Exchange Rate Today 6th November 2023
Business3 weeks ago
Nigeria’s Logistics Sector Holds Untapped N3tn Potential, Says Courier and Logistics Management Institute
Black Market Rate3 weeks ago
Black Market Exchange Rate Today 14th November 2023
News3 weeks ago
Millionaire Powerplay Limited Unveils Unprecedented Odds in American Lotto’s Instant Cashless Payout
News4 weeks ago
N-Power Batch C1 Programme Successfully Concluded, Investigation Ensures Eligible Beneficiaries Receive Payments
Black Market Rate4 weeks ago
Black Market Exchange Rate Today 9th November 2023
Forex3 weeks ago
Black Market Exchange Rate Today 16th November 2023
Forex4 weeks ago
Black Market Exchange Rate Today 10th November 2023