In the last few days, Bitcoin (BTC) has risen massively again and is now holding above the $9,000 mark. At the latest since the cryptocurrency hype of 2017, Bitcoin & Co are an alternative asset class for investors. Although cryptos are still largely unregulated and financial market regulators such as the US SEC still have concerns about market manipulations, this has not hindered the rise. Bitcoin is actually no innovation anymore. The currency has been around for more than 10 years already. Now many experts see the next bull run up to $300,000 on their doorstep. These positive calls in the social media will again attract many scammers. We expect a tsunami of crypto scams for the next 12 months. Stay extremely cautious.
Bitcoin is hailed as the soundest form of non-sovereign digital money. Much of this reputation stems from a strictly regulated rate of supply growth, which unambiguously and mathematically limits total supply to 21 million bitcoins.
Kraken Intelligence Report “The Halving“
Scarce asset and long-term positions
The nice thing about Bitcoin (BTC) for many monetarists and investors is that the amount issued is limited to 21 million pieces. Like gold and unlike FIAT, BTC is, therefore, a scarce asset. This, in turn, should increase its value. At least theoretically.
Now, with the so-called Halving, a further limitation of the supply of BTC is imminent. At some point around May 12, 2020, the halving will halve the “reward” for BTC miners from 12.5 BTC per block mined to BTC 6.25. supply growth from 3.72% to 1.79%. For the first time ever, Bitcoin’s supply growth rate will fall below the 2% inflation target used by most central banks for their respective fiat currencies. It sounds like good news to investors with a long-term view, doesn’t it?
This kind of halving has already happened twice. Many analysts, such as the team of Kraken Intelligence, have pointed out that around the two halvings there has been a bull phase of 18-24 months. The rise of the BTC started a few months before the halving and then developed to a new peak in the months after.
The Halving story
The high point of the BTC after the first halving in 2012 was around $1,100. After a more than 80% correction to $213, the price rose to just under $20,000 after the second halving. This is a factor of 100. Even after that, there was a more than 80% correction to around $3,600 by the end of 2018. Since then, the BTC has risen back to its current level around $9,000 (May 5, 2020). Should the pattern of the past two halvings be repeated, the price target this time would be more than $300,000. This price target should be reached within 12 months after the halving. Many crypto-enthusiasts and analysts share this view and are preparing for the bull run.
The Scam Boom Reality
Fundamentally, cryptos should have a positive future. Blockchains have many advantages as global, secure and (tend to) decentralized transaction platforms. The BTC and along with him the other cryptocurrencies may or may not rise to the hoped-for $300,000. What is certain is that many scammers will take advantage of the halving hype.
The boiler rooms of the broker scams have already been boosted by the COVID-19 crisis. We have reasons to believe that the halving hype within the next 6 to 12 months will lead to a tsunami of crypto scams in the next months. We have to reckon with the fact that the scammers have climbed the learning curve and are becoming more and more professional. We urgently warn against entering into a business relationship with unregulated brokers and or crypto platforms.
