Will the Bitcoin halving drive it to a new all-time high?

The Bitcoin halving will commence in May with several analysts suggesting that the event could be the spark that ignites a cryptocurrency bull market.

Every few years, or every 210,000 mined blocks to be precise, Bitcoin undergoes a halving. A halving is where block rewards for miners gets slashed from 12.5BTC to 6.25BTC.

In its 11-year history Bitcoin has been through two halving events, one in 2012 and one in 2016.

On both occasions Bitcoin surged to a new all-time high within 12 months, with the latest coming in December 2017 when it reached $20,000.

More than two years later and Bitcoin continues to trade at around $8,000, which could provide an ideal springboard around the halving.

The theory is that as rewards for miners are reduced, the supply going onto the market also experiences a reduction. As supply dries up natural demand will cause price to go to the upside.

But the halving isn’t the only fundamental event that may cause a spike in the value of cryptocurrencies, with the widespread coronavirus sending shockwaves across global markets this morning.

With oil crashing by more than 20%, stock market indexes sliding by up to 10% and treasury yields performing woefully, it may prompt investors to seek a safe haven asset like Bitcoin or gold.

Gold has historically been a hedge to the financial system with price hikes occurring during major global events like the financial crisis in 2008.

It continued its rich vein of form last week as it surged to an impressive seven-year high of $1,700 per ounce.

With gold clearly performing well amidst global uncertainty, it bodes well for Bitcoin over the coming months especially with the block reward halving being just months away.

Key price targets for Bitcoin are at $13,200 and $20,000, although another bull market similar to the one in 2017 could drive price to an astonishing all-time high.

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