Bitcoin (BTC) was able to skyrocket above $9,200 for the first time since February when the virtual currency was in a bull market before the entire Coronavirus crisis affected the economy. Due to the current halving event discussion among enthusiasts, it seems that traders decide to enter the market not to be left behind.
One of the most important things related to the price increase experienced by Bitcoin and cryptocurrencies is related to the halving event that will take place as soon as on May 12. In this way, Bitcoin miners will be producing half of the rewards produced now. The new issuance of Bitcoin will fall from 12.5 BTC to 6.25 BTC per block.
Every four years - more specifically every 210,000 blocks - Bitcoin new issuance gets cut by half, something that doesn’t happen in fiat currencies. There are other digital assets that have experienced halvings, including Litecoin (LTC).
(Image provided by Bitcoinblockhalf.com)
If the demand for Bitcoin starts growing again and surpasses the offering and selling of BTC, we could see a large price increase that could help other virtual currencies to also reach new highs in a short period of time.
This is why it is very important to properly understand the effect a reduction in the supply of Bitcoin could have on the market. Just to put it into context, the first two times that Bitcoin experienced a halving event, it massively surged and broke previous all-time highs.
(Image provided by Massmux.com)
As we can see, after Bitcoin halvings, the price surged for several months. In this way, Bitcoin reached $20,000 in December 2017 when the entire market was investing in Initial Coin Offerings (ICOs).
Binance was able to set a new trading volume record with the current market bullishness. Indeed, the exchange was able to register a massive trading volume of almost $16 billion in the last 24 hours.
According to Changpeng Zhao (CZ) - the CEO and founder of Binance - the market entered into a FOMO mode in the last few hours.
Of course, the market has entered now into a correction after such a strong move upwards. This is why Bitcoin is now being traded close to $8,800. It will be important to follow how Bitcoin will behave in the coming days and if it is possible for it to continue this upward trend towards new highs.
The halving event is going to be very positive for the crypto market and it seems it is already attracting investors into BTC. This is despite the Coronavirus outbreak that affected the market in mid-February pushing Bitcoin to $3,800. After surpassing $9,200, Bitcoin grew by over 240% from its lowest price point in February 2020.
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