Tag Archives: mined

THAT’S WHY $440 BITCOIN PRICE IS LOW

Today Daniel Masters, ex trader at JP Morgan, published an interesting article about the bitcoin price on Linkedin. 
In this article, Masters comments the upcoming halving of rewards for the miners and its impact on the current bitcoin price.
Back in 2012, the mining activity reached the level of 210,000 blocks mined and the first halving occured, taking rewards down from 50 to 25 BTC. 
Right after that, the bitcoin price raised significantly, from $7 to $11 in nine months. 
We are now at roughly 409,000 blocks, and the next halving will take place at 420,000, a level that is estimated to be reached by next july. 
At that time rewards will lower again, from 25 to 12.5 BTC.

Bitcoin price will rise

According to Masters, it’s reasonable to expect another price rise following this event. 
Here is his explanation:
“Prices so far in 2016 have been relatively stable. That tells me that there is enough new investment and real time demand to match the creation of $575m new coin. It seems obvious that if that dollar-sized demand persists, which I believe it will, that the price of bitcoin must rise to meet it”. 
In a few words, it’s a simple matter of offer and demand, exactly the same way as it happens in the oil market, where a reduction in production determines a rise in price, given a stable demand. 
That’s basically why the current level of $440 is to be considered low.

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Amelia Tomasicchio