Bitcoin, now hovering around $7,500 after a sterling few months that’s seen the bitcoin price boom, has been trading sideways over the last couple of week, as the market processes what’s become the new normal.
The bitcoin price has almost doubled so far throughout 2019 and bitcoin bulls are already looking for the next catalyst to drive the price higher.
Now, with the closely watched so-called bitcoin halvening event, where the number of bitcoins awarded to miners for mining new bitcoin blocks will drop from 12.5 Bitcoin to 6.25 bitcoin, just under one year away, some bitcoin analysts are predicting a return to bitcoin’s all-time highs could be just around the corner.
Previous bitcoin halving events have corresponded with hikes in the bitcoin price, though there’s no guarantee that history will repeat itself.
“We are going to hoard bitcoin at this point in time,” bitcoin and cryptocurrency fund manager Brian Kelly told CNBC. “We’re not going to sell it. You generally have a rally a year into [a bitcoin halvening], and a year out of it. And so we’re just at the beginning of that stage […] a supply cut is generally bullish.”
A bitcoin halvening—there have been two since bitcoin’s creation in 2009—is a fixed event and will occur after every 210,000 blocks are mined, or confirmed, by the system.
Some 12 months after the first Bitcoin halving event in November 2012, the Bitcoin price reached what was then an all-time high of $1,000.
The 2016 halvening heralded last year’s bull run which peaked in December 2017 with the Bitcoin price reaching an eye-watering $19,000.
Bitcoin bulls and cryptocurrency watchers are hoping that in the run-up to next year’s bitcoin halving bitcoin and cryptocurrency holders will be hoarding bitcoin in anticipation the squeeze in supply will push up the price.
“It’s just real simple economics,” Kelly added.
The bitcoin price has climbed so far in 2019 but has so far failed to recover entirely after a disastrous 2018.
However, a lot has changed since bitcoin’s last halvening in 2016. Bitcoin’s massive 2017 bull run, which saw the bitcoin price go from under $1,000 per bitcoin to almost $20,000 in under 12 months, brought bitcoin into the investment limelight and to wider public attention.
Now, institutional investors are eyeing bitcoin and other cryptocurrencies, veteran investors who were previously dismissive of bitcoin’s long term worth have come on board, and big tech companies like Facebook and Square are keen to get involved.