A massive trigger is on the horizon for the cryptocurrency’s granddad.
Bitcoin stock (BTC-USD) seemed unstoppable in November 2021, as its price exceeded $70,000 per unit. The cryptocurrency has lost about 70% of its value since then and currently trades for around $19,000.
Was this merely a giant financial experiment gone wrong, or should investors keep Bitcoin in mind as a viable mechanism for diversifying their investment portfolio?
Bitcoin Stock has a track record of crashes and recoveries.
If you’ve followed the Bitcoin stock (BTC-USD) narrative for more than a few years, you’ll know that massive drawdowns are regular. In fact, three collapses in the last decade have been worse than the present one:
The major point is that Bitcoin (BTC-USD) rebounded from these massive drops in all three instances.
When compared to the causes of the prior collapses, the present scenario seems to be quite benign. Mt. Gox, a Japanese exchange responsible for nearly 70% of all Bitcoin transactions, was hacked in 2011, resulting in the loss of over 800,000 Bitcoins.
Despite this, Bitcoin stock (BTC-USD) recovered and rocketed to new highs in the following years.
If Bitcoin can withstand a 99% drop, I have little doubt it can rebound from the present bear market and macroeconomic headwinds.
The next halving might send Bitcoin Stock to a new high.
The next halving, slated for the second quarter of 2024, is likely to be the most significant trigger in the short future. If you’re totally new to Bitcoin, I recommend reading this instructive essay, which will provide you with a solid knowledge of the fundamentals.
The term “halving” refers to an occurrence that happens every four years. The Bitcoin protocol demands that the reward granted to miners be reduced by half for every 210,000 blocks mined. Miners were initially paid 50 bitcoins for every challenge completed.
Today, miners get 6.25 tokens, which is set to be decreased in half in around 18 months. No genius is required to understand that. if miners are rewarded with fewer Bitcoins, the value of those currencies will climb. It’s just basic supply and demand.
When we look at previous halvings, we can see how this assumption played out:
The possibility towards the end of the tunnel
Recently, Bitcoin has been placed into a wide basket of hazardous assets, and the market has punished it. However, investors should be aware that the market is a leading indicator and usually rebounds ahead of the larger economic climate.
Likely, supply chain restrictions imposed by the epidemic and Russia’s invasion of Ukraine will be resolved in the next 12 to 24 months, lowering the pace of inflation. This would almost certainly cause the Federal Reserve to change its rate-hiking approach, and it may very well be the impetus for growth investors have been looking for.
Given that Bitcoin has almost followed growth stocks in lockstep over the last year, the upcoming halving and a possible drop in inflation might send the coin’s price skyrocketing.
While we can only conjecture on the macro situation, we can be assured that Bitcoin will be halved sometime around 2024. And, if history is any guide, this will be excellent news for the price.
Featured Image – Megapixl © Williammacgregor
Author Okoro Chinedu 
