Connect with us

Cryptocurrency

Bitcoin Halving: Nigeria, Others Get Ready For Uncertain Bitcoin Future

Published

on

Bitcoin
  • 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.

Bitcoin 20000Therefore, 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.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Bitcoin

Bitcoin Needs Greater Regulatory Scrutiny – and Here’s Why: deVere CEO

Published

on

bitcoin

Bitcoin Needs Greater Regulatory Scrutiny – and Here’s Why: deVere CEO

Greater regulatory scrutiny of cryptocurrencies such as Bitcoin must become a priority as they continue to play an increasingly normalised role for investors, says the CEO of one of the world’s largest independent financial advisory and fintech organisations.

deVere Group’s chief executive and founder Nigel Green – a long time advocate of cryptocurrencies – is speaking out after both the UK’s Financial Conduct Authority (FCA) and the president of the European Central Bank (ECB) called for more robust regulations for cryptocurrencies this week.

The calls follow the price of Bitcoin jumping more than 300% last year and gained a further 40% earlier this month to reach an all-time high.

Mr Green says: “The calls by financial watchdogs and central banks for greater regulatory scrutiny must be championed as digital currencies, including Bitcoin, are set to play an ever greater role in the international financial system.

“What’s needed is a strong regulatory framework to be established and approved at an international level.  The forthcoming UK-hosted G20 summit might prove to be the ideal opportunity.

“Such regulation will help protect investors, tackle cryptocurrency criminality, and reduce the potential possibility of disrupting global financial stability, as well as offering a potential long-term economic boost to those countries which introduce it.”

He continues: “There is sustained and growing interest in the likes of Bitcoin from both retail and institutional investors. They are now increasingly handling the assets as they would any other asset in the portfolio –for example, sometimes profit-taking, sometimes reinvesting, using the volatility to their advantage, and using these alternatives to help with all-important diversification.

“These mainstream, normalised investor strategies demonstrate that cryptocurrencies must come into the regulatory tent and be held the same standards as the rest of the financial system.”

Previously, the deVere boss has said that one of the best ways to address the regulatory issues is via the exchanges.

“Nearly all foreign exchange transactions go through banks or currency houses and this is what needs to happen with cryptocurrencies. When flows run through regulated exchanges, it will be much easier to tackle potential wrongdoing, such as money laundering, and make sure tax is paid,” he has noted.

“For this to happen, banks will need to open accounts for exchanges, which is why they must be regulated.”

Mr Green concludes: “Cryptocurrencies in some form or another are here to stay – and the market is only set to grow.

“There can be no doubt that regulation of the crypto ecosystem is required and, I believe, it should be a priority.

“The work being done by many international financial watchdogs, lawmakers and central banks, such as the FCA and the ECB, in this area is something I fully support.”

Continue Reading

Cryptocurrency

Bitcoin, Other Cryptocurrencies Free Fall as President-Elect Joe Biden Promises Trillions of Additional Stimulus

Published

on

Bitcoin

Bitcoin, Other Cryptocurrencies Free Fall as President-Elect Joe Biden Promises Trillions of Additional Stimulus

Investors appear to be locking in profits and jumping off unregulated crypto-asset Bitcoin and other cryptocurrencies following the official declaration of Joe Biden as the President-Elect of the United States.

Bitcoin plunged by over $8,000 to $33.781 per coin, down from over $41.457 per coin it traded a few days ago.

Ethereum followed with a 15.17 percent decline to $1,067.30 per coin.

Stellar and Ripple lost 11.71 percent and 15.36 percent, respectively.

The decline in cryptocurrency value was as a result of the recent stimulus announcement by President-elect, Joe Biden, and the fact that Democrats now control both the lower and upper houses. It means little to zero policy hindrance when President Biden is officially sworn in on January 20, 2021.

Businesses and investors are now more optimistic about other sectors of the economy and expect the new stimulus package to boost stocks and other traditional assets that are better regulated than the crypto space.

It means institutional investors that are jumping on bitcoin and other cryptocurrencies have started holding back to assess new opportunities opening up with the incoming president.

Also, the American Dollar sustained its bullish trend against haven currencies and other currencies as investors up purchase of American assets as evidenced in the surge in yield.

Continue Reading

Cryptocurrency

Coinbase Acquired Routefire to Deepen Operations

Published

on

Coinbase Acquired Routefire to Deepen Operations

The leading U.S cryptocurrency exchange company, Coinbase, has acquired Routefire, a trade execution startup, in an effort to expand and improve its exchange business.

In a blog post by Jason Victor, the Chief Executive Officer, Routefire, the company can executive $1mm+ orders with 50 basis points or more in price improvement.

The blog read in part, “After an incredible journey that began in early 2018, it is with pride and a deep sense of gratitude that today we are announcing we will be discontinuing Routefire’s services and our team will be joining Coinbase to continue developing best-in-class execution services for digital assets.

“We’ve had an incredible few years serving this community. When we entered the space, crypto market infrastructure was in its infancy, and traders were sorely in need of a solution that allowed them to execute quickly and efficiently across venues without suffering the market impact common to large block orders.

“Our mission was to enhance trading infrastructure in crypto markets, and we developed one of the most performant tools in the space, routinely filling $1mm+ orders with 50 bps or more in price improvement. Most of all, we enjoyed listening to and partnering with our customers to build the Routefire platform.”

A spokesman for Coinbase confirmed the transaction but refused to comment on the details.

Continue Reading

Trending