Kvě 04

Bitcoin Will Be Over $10K By 2020 Halving, Model Shows

Despite a slight dip, Bitcoin price is still expected to surpass $10,000 by the next block halving, according to Stock-to-Flow models.


As originally posted by the Twitter user planB, Bitcoin remains on course to exceed $10,000 and perhaps even $100,000 according to trend-following macroeconomic models.

The significance of stock-to-flow

The graph above shows a correlation between bitcoin reward halving and the price of bitcoin, mapped by year and counting down until the next halvening event that will occur May 2020. Most importantly, the price appears to follow the Stock-to-flow macroeconomic model.

The SF model displays a price uptrend. Notably, as the halvening is expected to reduce sell pressure on the supply side. A lack of interest from sellers could help the price climb upwards from its current levels.

However, these kinds of rallies are stymied by a lack of selling pressure rather than interest from buyers, and can quickly climb into overbought levels followed by a sharp downside correction.

The halvening countdown

Bitcoin block reward halvings occur roughly once every four years. Each time the network halves the network reduces the mining reward by 50 percent. At present, miners are rewarded with 12.5 BTC each time a block is mined. By May 2020, that number will be halved down 6.25 BTC.

There are less than 390 days to go.

As Bitcoinist has reported previously, the price of Bitcoin seems to rally one year after the ‘halvening’ event occurs. In fact, there appears to be a direct correlation between the price of bitcoin and halvening events that cannot be ignored.

There have been other models used to predict the price of Bitcoin that pushes the price of Bitcoin higher — except on a more futuristic timescale.

For instance, a $1 trillion market cap was predicted for Bitcoin after the halving that will occur in 2020 implying a price of $55,000.

However, the price of bitcoin could climb to even higher levels in 2023. A “massive rally” could push the coin to the astronomical price of $10 million dollars. This figure was taken from the model that prices seem to increase bi-laterally, as well as hash rate, which analyst, Max Keiser says “never left” the bull market.

Given these theories, we can expect the next halvening event to be a major cornerstone in Bitcoin’s history and have a significant impact on the currency’s evaluation. How high bitcoin’s price will climb is still up to debate, but the consensus overall is that we can expect higher prices than what we’re seeing now as shown by previous halvings and bitcoin stock to flow.

Will bitcoin price be over $10,000 by 2020 at the time of the halving? Share your thoughts below!


Images via Shutterstock

The Rundown

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Pro 23

Bitcoin Price to $17K in 2020, Says ‘Unorthodox’ Mining Difficulty Prediction

An ‘unorthodox prediction’ of mining difficulty increases puts the bitcoin price somewhere around $17,000 in 2020 — due to the possible power law relationship between the two.


Bitcoin price and difficulty ‘power law relationship’

Twitter user @100trillionUSD is back again with another intriguing chart — this time plotting the relationship between BTC price 00 and expected bitcoin mining difficulty in the coming years.

The previous graph visualized the relationship between the bitcoin mining reward halving and its impact on price over time, plotting the months before the halving event took place. This time the focus was on mining difficulty and price, since many analysts consider it to be inextricably linked to network hash rate.

 “Price follows hashrate,” said Max Keiser earlier this year. Adding that it’s been his “mantra” since bitcoin was at $3.

Mining is undoubtedly profitable when the hash rate is rising. It also means miners are confident in the future of Bitcoin if they are adding hardware to scale up their operations. However, a high hash rate also causes the Bitcoin mining difficulty to increase. This makes the mining process more resource-intensive as more hash power is needed to achieve the same results as at lower difficulty levels.

If the hash rate is too high relative to the price at which miners can sell their mined bitcoin (as we’ve seen this year), the most unprofitable miners will likely drop out. They may sell their equipment or simply turn off their rigs until the price recovers or it becomes easier to mine as difficulty adjusts. 

“Based on the poll results on bitcoin difficulty and the possible power law relationship between bitcoin price and difficulty (see formula below), an unorthodox prediction of the 2020 bitcoin price would be: $17,317,” explains 100trillionUSD.

Overall, 85 percent of respondents believe the difficulty will increase 10-100 times in the next two years. Meanwhile, only 10 percent think this is the beginning of the end for Bitcoin mining frequently referred to as the ‘death spiral’ (more about this later).

The biggest share of respondents (59 percent) expects the difficulty to rise 10x between today and the end of 2020. A smaller group (27 percent), however, believe the increase could be as high as 100X, which would translate into a price above $28,000.

Granted, the poll sample size was rather small with just over 250 votes. Nevertheless, mining difficulty is an important factor to consider for not only predicting BTC price but also evaluating the state of the network as a whole.

Difficulty Drops But No ‘Death Spiral’

Bitcoinist recently reported that the Bitcoin network mining difficulty just had another downward adjustment to lower price. The biggest in seven years, in fact, amid a year-long bear market that saw an 85 percent drop in market capitalization from its all-time high in late 2017.

But contrary to many ‘experts’ equating a break in the trend to the start of a mining ‘death spiral,’ the difficulty adjustment is an important counterbalance for the Bitcoin network. In other words, the adjusting difficulty (every 2016 blocks) relative to hash rate is a feature that enables the Bitcoin network to find the equilibrium for mining profitability.

What’s more, this is similar to what central banks do by raising and lowering interest rates with changing market conditions. However, in Bitcoin’s case, the adjustment is entirely baked into the code and thus, entirely predictable. 

Is mining difficulty a good metric to consider when predicting price? Share your thoughts below! 


Images courtesy of Shutterstock, blockchain.info, @100trillionUSD.

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Čvc 10

Price Report: Bitcoin is Dominating Argentina

Source: bitcoin

Argentina

Another small rise is in the books. Following a drop to $639, the price of bitcoin has jumped up to about $645 at press time.

Also read: Pounds vs Yen: The Battle Over Bitcoin Rages On

At first glance, this appears to be a meaningless rise. Just a few dollars, nothing to scream and shout about, but considering the circumstances surrounding the halving that has now officially taken place, the results are something to celebrate.

The price of bitcoin fell about 5 percent at midday on Saturday, slumping to the $620 range. This drop was only temporary, though, as just a few hours later the price rose by an additional $20, causing everyone to breathe a deep sigh of relief.

Following the first Bitcoin halving about four years ago in 2012, the price of a single coin dramatically increased. We’re likely to witness a similar spike in the coming weeks, granted these results repeat themselves.

“The impact of the halving isn’t based on size, it’s based on marginal profitability,” explains Erik Voorhees of Shapeshift.io.

But some aren’t looking at the halving as an influence at all, believing action in countries like Argentina could lead the digital currency towards a particularly impressive jump. This is where a few unusual situations come in.

Bitcoin Saves the Day in Argentina

In Buenos Aires, the capital city of Argentina, growing “dial-a-ride” service Uber is facing opposition for allegedly operating without permits or tax-identification numbers. Lawsuits from taxi companies are popping up regularly, and credit card companies have blocked Uber payments. Even city officials are taking a stance.

So what’s Uber done? Wanting to stay in business, the ride-sharing service has turned to bitcoin company Xapo, where it has found security in a bitcoin-funded debit card that customers can use to purchase rides. The card is not used locally; rather, transactions occur out of Gibraltar, an area that doesn’t oversee or block Uber payments. Xapo head Anni Rautio says the process of obtaining a card is easy, and the company has already witnessed several customer requests:

“All they have to do is set up their Xapo and receive it at home, and it’s ready to use… This is a very specific situation with a very specific problem and a very specific solution… Since last week, all Uber users in Argentina have been able to use their Xapo bitcoin debit cards to pay for their Uber rides… This is a win for all local Uber users and drivers, and for Uber as a company, as they are able to continue operations in Argentina through Xapo’s debit card.”

So in its fight to garner financial independence for users, it would appear that bitcoin has chalked up another valiant win.

Do you foresee another massive rise? Post your thoughts and comments below!


 

Images courtesy of Uber, Wikimedia Commons.

The post Price Report: Bitcoin is Dominating Argentina appeared first on Bitcoinist.net.

Price Report: Bitcoin is Dominating Argentina

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Čvc 06

The Halving Month Is Here; What Will Happen to the Bitcoin Price?

Source: bitcoin

Bitcoin halving

Another rise in the bitcoin price — since our last price piece, bitcoin has jumped up by about $3, and is hovering around $673 at press time. With the highly-anticipated block reward halving drawing ever-near, this bump might be an indicator for an even larger rally in the coming days.

Also read: Are the Winklevoss Twins Bringing the Bitcoin Price Back Up?

The Halving: What’s Going to Happen?

The halving month has finally arrived, and this could potentially be the first of several jumps in the coming days and weeks. While no one is making any real predictions yet, the fact is that there is no going back. Bitcoin has reached ‘the point of no return,’ and production of the virtual currency is set to be significantly cut.

One plausible action might be to stock up on bitcoins now.

While we’ve witnessed heavy drops in the past, some still believe that bitcoin is the strongest and most stable currency in today’s financial markets, so unless their stashes are already massive, it may be best to take matters into their own hands with what little time they have left. With their savings and earnings all chalked up in the Bitcoin arena, their best-case scenario is to add to their stashes and buy bitcoin now before it surpasses the $700 mark.

But this is merely a suggestion. Some analysts don’t see a $700 bitcoin as a sure thing (one never can in the world of digital currency), and advise Bitcoinists to be careful (as usual) with whatever coins they already possess. One source relays the unpredictability of the ongoing market in full fashion:

“There is no telling what the market will do next. One scenario is that price consolidates into the next wave of advance – and gives us the expected buy signal in the coming days. Another scenario is that decline continues. In the case of the latter, we’d expect to see the price revisit the previous low near $560… If there is an upside, the market should find support at $650 and begin advance toward $755. If $650 breaks, then $560 could be the target.”

The bottom line is that one should invest, but do so carefully. While this may sound like typical advice, we don’t know which way the market will turn presently. With the halving approaching, ready to strike us hard in the chest, the circumstances may be more unpredictable than ever, so investors are advised to look both ways before crossing the street.

Will the bitcoin price rise significantly in the coming week? Post your thoughts and comments below!


Images courtesy of Shutterstock, Crypto-Graphics. 

The post The Halving Month Is Here; What Will Happen to the Bitcoin Price? appeared first on Bitcoinist.net.

The Halving Month Is Here; What Will Happen to the Bitcoin Price?

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