Javier Pastor, Commercial Director of Bit2Me, holds an interview with the Dirigentes Digital portal to explain the third Bitcoin halving and the impact it will have on the crypto community and investors.
Many experts agree that the third Bitcoin halving, which took place recently, is a crucial and decisive event for all its investors. Well, it is expected that in the medium and long term, the value of this cryptocurrency will grow exponentially. As has happened on previous occasions after this important event occurred. Likewise, the halving does not mean any modification for the network. Therefore, users will be able to continue operating normally within the Bitcoin network, as they have been doing to date.
This information was released by Commercial Director of Bit2Me and also Professor at the CEU University of San Pablo, Javier Pastor. In a direct interview with the Dirigentes Digital news web portal, which took place last week.
During this interview, our Business Director expressed his opinion on how this Bitcoin reward reduction process may affect the economic development of the cryptocurrency. And how This phenomenon can cause situations similar to those seen in previous halvings.. Which can be a great investment opportunity for all those who use Bitcoin as an investment system and as a refuge of value.
“The factors that will help the rise in the medium and long term are mainly the reduction in the available supply of Bitcoin, greater information and ease of use and access to technology and the need for refuge from authoritarian regimes and monetary policies that lead many fiat currencies to lose their value.” Javier expressed.
Likewise, in anticipation of this event and to date, the focus of the majority of the cryptographic community is focused on the economic repercussions that this particular phenomenon brings with it. Well from now on, The circulation of this crypto asset is reduced by 48,7%.
Going from 3,7% to 1,8% of the available annual supply, with more than 87% of the total bitcoins in existence put into circulation. Fact that reaffirms the scarcity and deflation nature of Bitcoin. Therefore, many experts consider that the cryptocurrency will reach a higher and exponential level of value than it currently has. In fact, the value of Bitcoin is around $9.500 per unit.
But what is the Bitcoin halving and what is its importance?
Halving is a phenomenon that occurs within the Bitcoin system. And it allows the rewards granted to miners to be reduced by half for the generation of new blocks. This process takes place approximately every 4 years. Although to be more precise, It happens automatically every time 210.000 blocks are mined within the network. Something that happened on May 11 in the afternoon when block 630.000 was mined within the Bitcoin blockchain.
Source: ChartsBtc
At the time of its launch, in January 2009, the Bitcoin network granted a reward of 50 BTC to miners. Those who are in charge of validating transactions, generating new blocks and securing the network. Thus, when block 210.000 was mined, on November 28, 2012, the reward received by miners became 25 BTC. And later, on June 11, 2016, when block number 420.000 was mined, this reward was reduced to 12,5 BTC.
Therefore, this May 11, 2020, When block number 630.000 was reached, the network began to grant a reward of 6,25 BTC to the miners. for each new block generated. However, will this fact really cause an important and decisive change in the rise of Bitcoin's value within the market?
First of all, we must remember the magic and frenzy that was experienced in 2017, almost a year after the second Bitcoin halving. Where many of the holders of this cryptocurrency, mostly cypherpunks and geeks, found themselves with millions of dollars in their wallets. When the price of the cryptocurrency increased exponentially.
“IN 2012 THE PRICE OF A UNIT OF BITCOIN WAS 12 DOLLARS AND REACHED 1.139 TWO YEARS LATER. IN 2016 A BITCOIN COST 200 DOLLARS AND REACHED 20.000 IN 2017. TODAY IT IS 8.800 DOLLARS AND IT IS ESTIMATED THAT IT COULD REACH 100.000 BY THE END OF 2021”PASTOR EXPLAINS.
Likewise, Javier Pastor also emphasized that, with this third halving, Bitcoin value may reach $100.000 per unit by the end of next year.
Learn with Bit2me Academy: Know everything you need to know about the halving
So what to expect and do with the third halving?
In this sense, Pastor believes that Bitcoin holders and new investors can take advantage of possible corrections and volatility in the market to acquire the cryptocurrency.
"Volatility is expected to continue in this market in the coming months and years. In the short term, probably and based on data from previous halvings, it is possible that there will be a correction. Something that already happened the day before... In the medium and long term, increasing demand is expected and, therefore, a rise in prices. In addition to new applications, tools and actors joining the ecosystem, the looming economic and monetary crisis will highlight the refuge characteristics of this asset."
Likewise, Pastor mentions that since many of the investors who have 10 or more bitcoins in their wallets have not moved their coins in years, this means that with the third halving there will be a much smaller number of bitcoins available on the market. Which will also result in a significant increase in its price and value. Well, since there is the same demand for the cryptocurrency, or even greater, with less availability of it in the market, the price will tend to rise with incredible force, explains Pastor.
However, despite this, one cannot be 100% sure of the real impact that this phenomenon will cause on the price and value of Bitcoin in the markets. But based on the studies carried out and the data obtained from previous halvings, There may be a high probability that with this third Bitcoin halving the same behavioral patterns seen years ago will be repeated.
In addition, it should also be noted that the value of Bitcoin is given by its many characteristics and qualities, which perfectly emulate and surpass those of gold. With the addition of advanced technological components that make Bitcoin a unit of account and storage of value that is practically unsurpassed. Capable of guaranteeing freedom and autonomy over funds and assets held independently, equitably and securely for all.
"On the other hand, I think Bitcoin has to be part of a complete portfolio. Let's think that it meets many of the characteristics of gold. But with a technological component that surpasses metal as a medium of exchange, unit of account and storage of value... Add that Bitcoin is regulated in itself, with norms and rules based on mathematics and cryptography that make us all participate on equal terms. . Regardless of our country, ideology, religion or social status.” concluded Pastor.
In addition, through the implementation of the blockchain, financial agreements can be generated much more quickly and safely. This compared to traditional systems. Through this technology a user can transfer the amount of money they want without major difficulties. No matter where you are in the world and just having an Internet connection.
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