Crypto

What is bitcoin halving, when will it happen and why can it cause the currency’s price to skyrocket?

Published

2 weeks ago

April 15, 2024

What is bitcoin halving, when will it happen and why can it cause the currency’s price to skyrocket?

Cryptocurrencies and precious mineral deposits seem to have little to do with each other. But these two distant worlds are closer than they appear in the cryptosphere, at least metaphorically. With bitcoin halving scheduled for the middle of this week, mentions of blockchain mining are proliferating, as is the role of miners in keeping the bitcoin ecosystem going. This “invisible” part, which makes it possible to issue new tokens, will halve its profits, which has happened three times before, in 2012, 2016 and 2020. This does not mean that the price of the cryptocurrency will fall in the same way: the market expects that, as supply is reduced, logically, demand will increase and so will its price, which has risen by 50% so far this year.

With the price of the main cryptocurrency already soaring above €65,000 ($69,150.25) and in full bloom thanks to the success of exchange-traded funds, here are some keys for better understanding this new milestone for a sector seeking to leave a long winter behind.

What is halving?

Halving is a consequence of the blockchain technology behind bitcoin. To create a new currency, the system requires computers, or miners, to verify transactions. These users receive benefits: a certain amount of digital coins. Thus, since 2020, participants in this activity have received 6.25 bitcoin for every 210,000 verified network blocks; from now, on they will receive half that: 3.125 BTC.

“It is a mechanism that tries to copy what happens with a single deposit of a precious mineral,” notes Mireya Fernandez, the head of the Bitpanda exchange for southern Europe. “At the beginning, it’s all confusion, so the first miners are paid better. Then, as time goes by, there is less and less ore available, less is mined and the product’s price can increase,” she notes.

Reducing the reward for miners is intrinsic to bitcoin’s supply and demand. Although bitcoin is digital money, it cannot be created infinitely, and verifiable scarcity is central to its value proposition, which makes it appealing in highly inflationary markets like Argentina and Nigeria. The cryptocurrency is designed for a finite number: at most there will be 21 million tokens.

Why is it important?

All the experts we consulted agree that the sector is heading for a moment of consolidation and maturation, driven by new investment products and the entry of large institutional players. “In particular, bitcoin is experiencing a new boom driven by regulatory and market access developments,” notes Guido Lonetti, product director at digital bank N26.

After a period defined by fraud cases and the falling prices of all digital currencies, this context of good news makes any news at all more worrying. As with any other investment asset, any news can generate a strong inflow or outflow of capital, but, in this case, bitcoin’s volatile nature only exacerbates this trend.

“It is a mistake to be too vigilant,” notes Jorge Soriano, the head of the Criptan platform. “The bitcoin issuance schedule is known from the beginning. The characteristics and properties of the currency go far beyond this one-off milestone,” he emphasizes.

How does it affect investors?

Historically, this milestone has served to generate buzz. Bitcoin investors tend to welcome this date with enthusiasm, which increases the conversation about it, as well as capital inflows into the crypto world. “The community experiences it like New Year’s Eve and expects changes in the price,” says Fernández, although he points out that the user already has gained experience over all these years. He says that it is a more mature community with more criteria and more capital.

However, Lonetti says, the sharp rise in expectations can also lead to more scams and frauds. “The enthusiasm for the world of cryptocurrencies is not lost on cybercriminals, who are always coming up with new ways to commit crimes. Common cryptocurrency-related fraud can range from pyramid schemes and fake websites to fake celebrity endorsements and inflating the price of an unknown cryptocurrency.” The organization recommends “being wary of supposed opportunities that guarantee profits, have excessive marketing, lack technical documentation and offer free money.”

What impact can it have on the price?

That is the real question the community is asking, as historical data indicate to expect a sharp rise. In 2012 and 2016, the halving led to a price increase of almost 10,000%. For example, before the halving that occurred in November 2012, the currency was trading slightly above $10. Just five months later, in April 2013, it was above $200. This upward trend continued until the end of that year, when it exceeded $1,000 for the first time.

In any case, the increase seemed to have moderated greatly in 2020, when the currency only gained 400%, albeit in a context shaped by the pandemic, lack of regulation and interest rates at historic lows. “We are not at the fever pitch of a few years ago, but we are optimistic about what may happen,” Fernandez summarizes.

The market’s most skeptical voices point out that, although there is a correlation, there is no causality between this technological milestone and a price increase. This discourages the most optimistic voices, who fantasize in specialized forums that the value of the currency will soar above $435,000 by the end of 2024. “Obviously, past events do not guarantee future events,” says Soriano. Manuel Villegas, digital assets analyst at Julius Baer, estimates that the halving could serve as a catalyst for a new growth cycle in the cryptoasset market.”

Will it have any effect on ETFs?

Analysts stress that the effects will at least crossover. Investor interest in accessing bitcoin through exchange-traded funds may increase if the price soars or if FOMO — fear of missing out — increases in the face of multiple reports of high investment returns in a more secure and regulated environment. At the same time, the existence of these investment vehicles means that the crypto asset price is not as volatile as it was previously, especially given the participation of institutional players who, for the time being, do not seem so concerned about volatility.

Halving could also indirectly impact investment portfolios. In addition to bitcoin ETFs, there are a number of funds related to the crypto industry in the U.S. market. For example, the Valkyrie Bitcoin Miners ETF (WGMI) invests in companies involved in mining this digital currency, which, until recently, was a way to gain exposure to the crypto world in the stock market. In a more competitive environment among miners, the smaller ones could disappear, which would benefit this fund, for example.

What is a bitcoin miner… and why are you late to this business?

What other factors impact this context?

The market is attentive to two related news items. On the one hand, the success of large fund managers in promoting bitcoin exchange-traded funds launched in January this year. It is important to remember that in 2017 Larry Fink, the CEO of the giant BlackRock, called bitcoin a “money laundering index” but today he is a big believer in the cryptocurrency. The iShares bitcoin fund — BlackRock’s ETF banner — manages over $16 billion, almost 30% of the total capital in these investment vehicles.

A new development may also come from BlackRock: the ETF approval of Ether, the second cryptocurrency behind bitcoin. Fink’s firm is one of the many companies that have asked the US regulator to approve this type of fund. Although a frenzy like the one generated during this first part of the year is not expected, it would confirm an about-face on the part of the authorities who, while still wary of crypto assets, are at least seeking to establish a clearer regulatory environment.

Finally, what happens at the monetary policy level in both the United States and Europe will also be important. A possible reduction in interest rates on one or both sides of the Atlantic Ocean would increase interest in riskier investment alternatives, such as cryptocurrencies.

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Crypto

Exploring Blockchain and Cryptocurrency's Role in Gaming's Future

Published

45 mins ago

April 29, 2024

Press Room

Exploring Blockchain and Cryptocurrency's Role in Gaming's Future

The evolution of the gaming sector is embracing a significant shift with the introduction of blockchain and cryptocurrency technologies. This shift promises to redefine gaming dynamics, moving beyond enhanced graphics or immersive playing experiences.

It is true that experts tend to agree that the focus now includes transforming game playability, ownership rights and economic prospects within games. The crucial intersection between innovative technology and its practical implications is key for understanding gaming’s future direction.

The convergence of blockchain and gaming is not merely a passing trend but a fundamental shift in how people perceive and interact with games. It opens up new avenues for player engagement, ownership and monetization, blurring the lines between virtual and real-world economies.

As more developers and players embrace this technology, it has the potential to revolutionize the entire gaming landscape.

Deciphering Blockchain’s Potential in Gaming

Blockchain technology introduces a decentralized mechanism for validating various transactions, which, when injected into gaming, promises enhanced security and the possibility of genuine digital possession.

This feature allows players potentially to own in-game assets, characters or even segments of the game’s universe. Early adopters, such as Cryptokitties and Axie Infinity, have already demonstrated the potential, enabling players to acquire, nurture or engage with distinct digital entities, each authenticated and owned through blockchain.

Integrating Cryptocurrency within Virtual Game Worlds

Gaming and cryptocurrency represent a perfect synergy. In-game economies are inherently intricate, facilitating the trade of goods, services and virtual currencies. The incorporation of cryptocurrencies streamlines these exchanges, making them more secure, immediate and globally accessible, eliminating concerns over fluctuating exchange rates and transaction costs.

This integration, however, is not without its challenges, including a steep learning curve and the unpredictable nature of cryptocurrency values. Despite these obstacles, the gaming community’s growing familiarity with cryptocurrency is turning these challenges into exciting gameplay components.

Forecasting Technology’s Influence on Gaming

Technology enthusiasts project a vibrant future for blockchain and cryptocurrency within the gaming industry. As virtual and augmented reality technologies continue to advance, their amalgamation with blockchain could spawn novel gaming experiences.

Players might navigate through digitally constructed realms, owning or trading parts of these spaces, secured and validated by blockchain.

The prospects for creating more immersive, interactive and economically beneficial games are vast. However, this enthusiasm also carries a note of caution, stressing the importance of balance and preserving the joy found in gaming.

Behind the Scenes: The Technical Side of Blockchain Gaming

Developing a game based on blockchain technology demands a blend of expertise in both game design and blockchain’s technicalities. The challenge lies in employing this technology while maintaining game engagement and ease of access.

Leading games in this niche have managed to integrate sophisticated technology subtly, concentrating on enriching the gaming experience with blockchain’s advantages. As such games grow in popularity, they chart the course for a novel gaming era, marked by player empowerment and inventive gameplay designs.

The integration of blockchain and cryptocurrency is just beginning to unveil its impact on the gaming industry. Platforms like Techopedia continue to be crucial in demystifying these technologies, enabling gamers and developers to harness the benefits of this new era.

The future of gaming appears bright, laden with opportunities and discoveries at the nascent stages of this digital voyage and with the rise of Artificial Intelligence (AI) and Virtual Realities (VR), who knows what the future holds?

Crypto

Solana Advances Congestion-Alleviating Central Scheduler Feature to Testnet – Altcoins Bitcoin News

Published

8 hours ago

April 29, 2024

Press Room

Solana Advances Congestion-Alleviating Central Scheduler Feature to Testnet – Altcoins Bitcoin News

Anza, a dev collective behind Solana, recommended the adoption of Agave v1.18.12 into the blockchain’s devnet and testnet. This new version of the mentioned client ships with a central scheduler that aims to reduce congestion by increasing fee collection and reducing conflicting transactions. Anza is calling for increased testing on this functionality. Anza Calls for […]

Crypto

BlockDAG and Ethereum ETFs: Pioneering the Next Wave in Cryptocurrency Investments With BDAG Coin Gaining Over $21.3 Million In Presale

Published

15 hours ago

April 28, 2024

Press Room

BlockDAG and Ethereum ETFs: Pioneering the Next Wave in Cryptocurrency Investments With BDAG Coin Gaining Over $21.3 Million In Presale

As the cryptocurrency market continues to expand and diversify, Ethereum ETFs and the groundbreaking BlockDAG platform are emerging as leading contenders for the next major boom in the sector. Ethereum ETFs provide investors with a traditional way to invest in crypto through stock markets, combining the innovation of cryptocurrency with the stability of established financial systems. Meanwhile, BlockDAG introduces an innovative platform with a potential 30,000x return on investment, setting the stage for monumental $21.3 million financial gains and technological advancements within the blockchain realm.

Unprecedented Investment Opportunity with BlockDAG

BlockDAG offers an enticing investment opportunity with projections of substantial returns. Early investors in the project’s presale phases are poised to see their investments potentially increase by 30,000% by its official launch, mirroring the early success seen with cryptocurrencies like Ethereum.

The platform’s strategic roadmap underscores its promising future, detailing plans to launch its mainnet within six months and aiming for a market capitalization of $600 million by 2024. This detailed and ambitious planning boosts investor confidence and highlights BlockDAG’s dedication to achieving long-term success.

Ethereum’s Success Story: A Guide for Crypto Investments

Reflecting on past successes in the crypto world, the story of an early Ethereum investor, Cooper Turley, who made a fortune from his investments during a bull run, serves as inspiration. Turley’s success underscores the transformative potential of investing wisely in emerging technologies at the right time.

BlockDAG: Shaping the Future of Blockchain Technology

BlockDAG is set to transform the blockchain industry with its innovative use of Directed Acyclic Graph (DAG) technology. This technology addresses the classic blockchain trilemma of balancing security, scalability, and decentralization, without compromising any aspect. Moreover, BlockDAG’s commitment to environmental sustainability through an optimized Proof-of-Work (PoW) model enhances its appeal to eco-conscious investors.

BlockDAG is gaining attention for its exceptional approach and advanced technology, which could surpass previous benchmarks set by other cryptocurrencies. With projections indicating its price could soar to $20 by 2027, BlockDAG presents a lucrative opportunity for early investors. This section explores how BlockDAG’s unique features could redefine the future of crypto investments and why it’s attracting significant investor interest.

BlockDAG differentiates itself with state-of-the-art technology, robust community engagement, and impressive presale results, achieving $21.3 million in sales within Batch 10. These achievements reflect strong market interest and affirm the project’s viability.

BlockDAG as a Cryptocurrency Portfolio Essential

Drawing parallels with Cooper Turley’s success with Ethereum, BlockDAG is positioned to be a pivotal success story in the cryptocurrency market. Early investors can participate in potentially exponential growth similar to Ethereum’s rise. With its visionary roadmap, commitment to sustainability, and a comprehensive suite of income-generating tools, BlockDAG stands out as a critical investment for those looking to diversify their portfolios and tap into the next big thing in crypto.

Looking ahead, BlockDAG’s combination of innovative technology, strategic market positioning, and potential for high returns makes it an indispensable addition to any investment portfolio with $21.3 million already secured in presale. Embrace the chance to invest in BlockDAG and be part of the thrilling evolution of the cryptocurrency market.

Experts predict that BlockDAG’s value could reach $20 by 2027, indicating significant ROI potential. Besides offering a robust digital currency, BlockDAG provides a portfolio of crypto applications that offer various passive income opportunities, catering to diverse investor needs.