2019 is seeing a renewed Bitcoin market craze, and its value seems to be destined for further increase.
Today, Bitcoin (BTC) continues its march to $13,000 and beyond, in an ongoing rally.
As of this writing, Bitcoin is valued at $12,207, in a continued and unprecedented improvement from the lows of 2018, when the value of Bitcoin tanked.
After a fear of missing out on the Bitcoin hype motivated the massive buyouts of the currency in 2017, uncertainty and confusion in the market demotivated buyers and the value of blockchain ended up dipping significantly from the highs of 2017 – from nearly $20,000.
Today, several factors are swaying the tide of BTC value.
Big names in the market are taking notice - and action
Two years later, a lot has changed, with Bitcoin and cryptocurrency in general gradually becoming modern day staples of finance. Awareness is growing around the topic, and big names in the industry have begun making strides in the field themselves.
Original naysayers such as investment bank J.P. Morgan Chase are now looking to pilot their own cryptocurrency by the end of 2019, dubbing it “JPM Coin.”
The market is certainly taking notice of crypto.
This year, Fidelity Investments conducted a survey amongst US institutional investors and found that 47% of them want to add cryptocurrencies to their portfolios, Reza Jafery writes for Hacker Noon. After all, cryptocurrencies are decentralized, not tethered to any real-world assets or currencies, meaning that they offer a (relatively) safe haven for investment, especially should sentiment and conditions continue to improve the way that they are.
The bigger player to arrive on the scene however is none other than Facebook, whose announcement of creating their own cryptocurrency, Libra, has saturated the news ever since the reveal.
With a big name such as Facebook entering the crypto game, as well as growing interest from Silicon Valley, both the market and the general public have taken notice, and there has been an overall uptick in sentiment towards crypto.
While it might be tricky to label Libra as a cryptocurrency, given that it is pegged against real-world assets, and unlike untethered cryptocurrencies like Bitcoin, the fact remains that Facebook has put stock in the concept. Sooner or later, every big and able corporation will be want to try their hands at this.
The “Halvening” is drawing closer
People obtain Bitcoin and other cryptocurrencies by mining them, where they have high-powered computers solve complex math puzzles and problems. The reward for mining a block? A handful of Bitcoins – 12.5 to be exact. At the current value of BTC, that’s approximately $152,500 per block, give or take minute-by-minute fluctuations.
The “Halvening,” as it’s come to be known, is a programmed aspect of Bitcoin (and some other digital currencies), where after a certain time (and amount of blocks mined), the reward for mining a block is permanently halved, to keep the currency’s inflation in check. The next Halvening will occur during May 2020, whereby mining a block will net miners only 6.25 BTCs.
This incoming narrowing down of supply generation is most likely driving people into a repeated fear of “missing out,” where people are buying crypto ahead of its potential value boom. After all, there are only 21 million bitcoins in existence. Garrick Hileman, head of research at cryptocurrency services firm Blockchain, told CNBC that around 80% of them has already been mined. He added, however, that the hard cap wouldn’t be reached for another 120 years.
In a sense, 2019’s fear of missing out is somewhat similar to the market craze of 2017. Who knows, though, if this rally will end the same way the previous one did.