In the hours leading up to press time, the price of Bitcoin (BTC) had breached the $10,000 mark, further extending a period of gains for the leading cryptocurrency, ahead of its third history halving.
The five-digit mark, according to many analysts, is a psychological barrier that has to be broken for any chance of the cryptocurrency revisiting its previous all-time high way back in 2017. The latest price surge is understandably a result of frenzy regarding the upcoming block reward halving, which will reduce Bitcoin’s daily issuance from 1800 BTC to 900 BTC.
Meanwhile, the surge also means that Bitcoin is back in excellent shape, having recovered all the losses that it shed as a result of the COVID-19 led market sell-off in March. It also means that the cryptocurrency’s price has hit the $10,000 mark for the second time in 2020, having visited prices above that area in mid-February.
As we’ve covered in earlier reports about Bitcoin’s upcoming halving, the significance of this inherent economic feature of the Bitcoin network is likely to cause a price increase in the months following the main event.
That popular notion was further reinforced by an earlier report today that U.S-based asset manager, Grayscale Investments, and Square’s Cash app absorbed over 50% of newly issued bitcoins in the first quarter of the year.
However, the effects of bitcoin’s supply reduction will most likely be felt in the long-term, suggesting that the current price rally is because of the advanced media exposure given to the halving event, and the steep decline in economic growth globally.
Interestingly, it is only on one out four earlier stints above $10,000 that Bitcoin has failed to at least visit the shores above $11,000 and beyond in a few days after that. Putting that into perspective suggests that the short term price rally could continue in the days leading up to the halving.