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Bitcoins and other cryptographic badets have reached a new level of support at US $ 3,500 in the past month, but is it about the bottom or is there still pain coming?
Bitcoin has a finite supply, limited to 21 million pieces. There is no government that prints more money in bitcoin.
No new parts can be manufactured beyond 21 million pieces. This allows the parent cryptocurrency to be less inflationary than the annual inflation rate controlled by central banks, which is generally close to 2%.
When Bitcoin was launched for the first time on January 3, 2009. It was set up to release 50 bitcoins every 10 minutes for minors.
Every four years, the code is halved, which halves the coins released. Thus, on November 28, 2012, the coins released fell from 50 to 25, then July 9, 2016, they were reduced by half, falling to 12.5 coins every 10 minutes.
Why is it important?
The next halving event will take place on May 25, 2020. It's next year!
The amount of the reward to minors will be reduced again. This means a reduction in supply and we know that when the supply goes down, prices go up.
In both cases, bitcoin has halved in the past, its price has increased significantly the previous year. Looking at the year before the last semester, we find that bitcoin went from $ 220 to $ 770, a return of 250%. The price before bitcoin went from $ 3.30 to $ 11.50, a return of 248%.
If we combine this with the fact that the cryptocurrency infrastructure is being set up at an accelerated pace, even when Bakkt is taking bitcoin, the future seems to be an economic environment characterized by a of supply and an increase in demand. This could be a huge event resulting in soaring prices.
We still have a few months left and we will probably see a downward pressure put the bar of $ 3200 to the test before things turn around, but the end of the pain may be in sight.
Also note that this does not mean that all crypto-currencies will recover. Unfortunately, many projects mismanaged the ICO money, resulting in project stagnation. Without money, most of these distressed projects will cease to exist, causing grief to their investors.
However, projects that have been executed correctly will pave the way for the future and not only survive the latter slowdown, but will far exceed their previous highs. Click here for a complete list of projects and our extensive research on blockchains that we believe will allow us to surf this new wave of wealth.
BTCUSD Charts By Tradingview
Originally appeared on NullTX
Image (s): Shutterstock.com
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