A UK finance chief says the recent rise in Bitcoin’s price is being driven by long-term investors hoping history will repeat itself.
The world’s most popular cryptocurrency enjoyed an unexpected spike in value this week, rocketing $1,000 to break through $5,000 – a figure untroubled for several months.
Analysts across the globe have been left scratching their heads over the sudden rise and sustained value, but the boss of a London blockchain investment company believes the answer lies in a technical alteration to BTC coming early next summer.
Bitcoin is being lined up for a ‘halving’ in May 2020 – a phenomenon which will see crypto miners earning fewer Bitcoins per block mined (a facet of the blockchain technology which underpins cryptocurrency).
After the halving, miners will only recover 900 BTC per day rather than the current 1,800. This means the demand for the daily Bitcoin supply will rise substantially.
This, believes George McDonaugh, is the driving factor behind Bitcoin’s current elevated path.
“The move higher has been sustained for a couple of days now, and whilst it is still too early to claim that this is the advent of the next bull run in cryptocurrencies, there are a couple of factors that indicate there is substance to this move,” the CEO and co-founder of KR1 said in a Coin Rivet article for the Daily Express.
“First is that the rally has cleared out a considerable resistance of sell orders just above the $4,200 level, which has led to a short squeeze on the bears, compounding the recent rally.
“Secondly, we are just over 400 days away from the next Bitcoin halving at the end of May 2020, and history has shown that this event is followed by a rally in the price of Bitcoin – it is still some way off, but investors look to be getting into position early in case history repeats itself.”
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.