Bitcoin underwent its very famous halving on 11 May 2020, which meant that the reward for mining Bitcoin has been reduced by 50%. The reward for mining before 11 May was 12.5 BTC, while the amount after the halving was 6.25 BTC. That is a massive salary cut for the miners out there. Most analysts and investors following Bitcoin has expected a price rally for Bitcoin after its halving, however, that is not yet happened. Even though the price has not yet skyrocketed since 11 May 2020, investors have not yet left the cryptocurrency.
Looking back at the year 2020, we saw Bitcoin as low as $3,867 seen in March. That is luckily lower than today. As the months have gone by, we are back up at the magic limit of $10,000. The market seems so have created a barrier at $10,000, which will take some effort to get through. In the cryptocurrency world, it is interesting to pay attention to large investors. What large investors do often say something about where people with influence and more money want the market to go. Large investors, also called whales, are continuing to buy Bitcoins.
Yesterday, the number of whales owning more than 1,000 Bitcoin were 1,840. The number of whales increased from pre-halving levels at 1,811, up nearly 2% according to the blockchain analytics firm Glassnode. The last time that many whales were in Bitcoin at the same time was back in November 2017. This increase in whales over time, and continues growth, indicates that investors are confident and expecting a price increase. Pretty much all analysts we have spoken to are bullish on Bitcoin over the next 12 months. Bloomberg analysts, as covered some time back, are expecting to see Bitcoin prices of $20,000 by the end of 2020 due to this increase in whales on the market.
The next step for Bitcoin
An interesting take on the increase in numbers of investors on the market, is the likelihood of breaking through the $10,000 barricade. It is important, obviously, to get through this obstacle as it will give the market a psychological boost. “We are bullish in the medium term with a target of $12,000”, said Matthew Dibb, co-founder of Stack, a provider of cryptocurrency trackers and index funds. He thinks the move to $12,000 would be preceded by a few weeks of erratic trading. If you are trading Bitcoin or invested in Bitcoin, it is important to pay attention to the new economic data coming out of the US. In addition to braking a psychological barrier, an increase in price will also draw more return-driven investors. If you want a return, you need, in today’s market to take a higher risk as the typical safe heavens with a couple of present as payment for risk minimization is gone.