Retail investors may return to Bitcoin again after the digital currency completed the one-in-four year adjustment called halving. Halving provides less rewards to miners who run high-powered computers to solve complex mathematical puzzles in order to generate new bitcoins. After this Monday, the current reward for unlocking a “block” has halved from 12.5 new coins to 6.5. Halving is part of the code originally written by the creator Satoshi Nakamoto to control inflation.
This is the third halving event in Bitcoin’s 11 year history. The next halving will take place 4 years later in 2024. Halving code in Bitcoin also ensures that rewards to miners will continue to halve every 210,000 blocks. The reward should reach zero in around 2 decades and will limit the number of Bitcoin in circulation at 21 million. Some investors believe that halving can make Bitcoin less attractive to miners. However, based on the history, after post-halving drop in price, there is a bull run. The 2016 halving for example triggered 300% jump in value of Bitcoin.
Investors often compare Bitcoin with Gold as they both serve as alternate currencies to the fiat money. With governments around the world continue to print money and add trillions of dollars to the money supply, Bitcoin can be a viable option to protect investors purchasing power specially with growing mass adoption of the digital currency.
BTCUSD 4 Hour Elliott Wave Chart
4 hour Elliott Wave chart above shows the rally from 3.12.2020 low ended at 10429.26 as a 5 waves impulse structure and we label this as wave ((1)). Pullback in wave ((2)) is in progress to correct cycle from 3.12.2020 low in 3, 7, or 11 swing before the rally resumes. Near term, while bounce stays below 10429.26, we can’t rule out another push lower to correct cycle from 3.12.2020 low
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