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Bitcoin (BTC) is now hovering around $ 7,600 after several weeks of rapid growth, and has been trading sideways for the last two weeks, as the market is getting used to the new “normal level,” Forbes reports.
However, the bulls are already looking for the next catalyst, which will increase the price. One of the main reasons for the growth is called the approaching bitcoin halving , which will take place in just one year.
According to the founder and head of cryptocurrency hedge fund BK Capital Management Brian Kelly, the upcoming supply reduction may help the growth of bitcoin prices in the coming months. He told about this in the Fast Money program on CNBC.
He explained that halving – halving the remuneration for mining – should occur in 2020. Many miners are currently accumulating BTC, which, coupled with an increase in demand for industrial and retail use of cryptocurrency, will lead to an increase in its price due to a decrease in supply.
Describing a four-year halving cycle, Kelly added:
“You usually rally the year before and the year after. And therefore we are at the beginning of this stage. A reduction in supply usually means a bullish trend. ”
His recommendation to investors is to allocate 1-5% of his portfolio for investments in cryptocurrencies.
However, much has changed since the last halving in 2016. The impressive growth of Bitcoin in 2017 was noticed by large investors and the wider public. Now bitcoins are being watched by institutional investors; Major technology companies such as Facebook and Square also entered the game.
Publication date 24.05.2019
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