The Bitcoin and Ethereum have slightly recovered resulting in the valuation of the crypto market increasing by $3 billion to $114 billion. Since January 29, the Bitcoin and Ethereum have both rebounded by 3 percent. However, they continue to remain volatile in a tight price range.
‘Moon Overlord’ a trader with an online alias, after taking into consideration the past performance of major cryptocurrencies, suggests that the block reward halving of Bitcoin, Litecoin and Ethereum. This could allow the three digital assets to recover in the mid-term strongly.
Analysts believe that only 1 percent of users could ever have more than 0.28 BTC, given that the supply of Bitcoin is fixed.
“If you own 0.28 BTC and HODL, you can be certain no more than 1% of the current world’s population can ever own more BTC than you. A modest investment of $1,830 today can ensure you are a 1%er in a future Bitcoin world,” said Steve Lee, a former Google Product Director.
It is believed that investors had already anticipated the halving years before it actually happened. However, a trader has stated that a bullish momentum could be created in the crypto market with the halving of Bitcoin and Litecoin’s block reward as well as the decrease of Ethereum’s block reward by 33 percent.
The trader mentioned, “LTC is halving in August of this year ETH is reducing its block reward by 33% in February BTC is having in a little over a year Block reward reductions and halvings are the most bullish events in crypto history, it’s time to pay attention and start accumulating.”
The rate in which miners mine new BTC will decrease given that the Bitcoin is expected to see its block reward decline by 50 percent by May 2020.
Because of the block reward halving, it is likely that the supply of BTC will be limited. However, the price trend could be impacted in case the demand for BTC continues to remain the same or increases.
Commenting on the supply of Bitcoin already being priced in, Chainalysis senior economist Kim Grauer said in November 2017, “That is a very complex question. On the one hand, direct calculations about market cap do not consider lost coins. Considering how highly speculative this field is, those market cap calculations may make it into economic models of the market that impact spending activity,”
For many investors who consider cryptocurrencies as long term investments, it is believed that the block reward halving is a positive catalyst that could boost the market.
Some traders expect that the halving might have an impact on the price of BTC by mid-2019.
Most major crypto assets and small market cap token have performed very poorly in comparison to both BTC and USD in the past three months, Binance Coin and TRON being exceptions.
However, BTC continues to remain vulnerable to a drop below the $3,000.