The last few weeks have been ones of great transformation for the crypto market. Not only because of the effects the Coronavirus crisis has had on it. Nor for the release of new products based on Blockchain technology. But because of the third Halving of Bitcoin that occurred a week ago, and which allows us to wonder if Bitcoin is the oil of the future.
Plus500 tells us all about Halving Bitcoin 2020
The crypto market situation
The Halving, and especially this third Bitcoin Halving, is one of the most important events for the entire crypto market. It consists of halving the reward received by Bitcoin miners for each mined block. It strongly reduces the rate of expansion of the BTC money supply.
Now, what is the objective of this event? With the Halves, Satoshi Nakamoto intended, and so far has succeeded, in creating a deflationary mechanism within Bitcoin. By sharply reducing the supply of cryptomoney and thus trying to positively influence its price.
The model for the execution of the Halves would be the situation of the gold market. Well, the value of the precious metal is essentially based on its scarcity. This, together with its trajectory as an active reserve of value at a global level, means that it has a high price in the financial markets.
Something similar to what happened in 2008, when the belief that the limit had been reached in oil exploration led to the price of a barrel of oil reaching 140 dollars. That trend was later reversed, with the emergence of an excess supply thanks to fracking activities in the United States.
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Bitcoin and oil today
However, Bitcoin can limit its offer as much as it wants, but if there is no solid demand in return, its price will not increase at all. That’s why the comparison that investor Frank Holmes makes between Bitcoin today and oil in 1890 is interesting.
For, as Holmes explains, in 1890, although oil was known and used by mankind, it was not until its use skyrocketed thanks to the automobile that the price and demand for oil also increased substantially. A process that Holmes says could be repeated with Bitcoin, as cryptomoney begins to be used massively worldwide.
The trend followed by the price of Bitcoin so far seems to indicate that cryptomoney is the oil of the future. Source: U.S. Global Investors
The trend followed by the Bitcoin price so far seems to indicate thatBitcoin Profit Scam – Bitcoin Formula Scam – Bitcoin Capital Scam – Bitcoin Code Scam – Bitcoin Lifestyle Scam is the oil of the future. Source: U.S. Global Investors
A position that seems to coincide with that of institutional investor Paul Tudor Jones, who despite focusing his portfolio mainly on gold, expects Bitcoin to also increase its price very soon. Comparing the virtual currency to gold in 1970, 10 years before it reached its peak in the 1980s.
Of course, for Jones‘ and Holmes‘ predictions to come true, a true massification of Bitcoin worldwide will be needed. Which is to solve the scalability problems that are currently affecting cryptomoney. However, the price of Bitcoin is likely to rise in the short term, even with the obstacles that prevent its massification.