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Bitcoin Halving Demystified: What You Need to Know

What is Bitcoin Halving?

Bitcoin halving is a scheduled event that occurs once every 210,000 blocks, or approximately every four years, that reduces the reward for mining Bitcoin transactions by half. This mechanism is built into the code of Bitcoin by its creator, Satoshi Nakamoto, to control inflation and mimic the scarcity of precious metals. The next halving event is scheduled for April, making it a hot topic in the cryptocurrency community.

Why Does Halving Matter?

The halving event is significant for several reasons. Firstly, it impacts the supply of new Bitcoins entering the market. By reducing the reward for miners, the rate at which new Bitcoins are generated slows down, which can lead to decreased supply and increased demand. Historically, this has had a bullish effect on the market in the months following the halving.

Moreover, halving is seen as a milestone that reinforces Bitcoin’s value proposition as a deflationary currency, unlike fiat currencies which can be printed indefinitely. This scarcity principle is a key reason why many view Bitcoin as “digital gold.”

Historical Impact of Halving:

Looking back, the Bitcoin price has shown a significant upward trend following past halving events. While past performance is not indicative of future results, these patterns are closely studied by investors as they speculate on the cryptocurrency’s future value.

Conclusion:

As we approach the next Bitcoin halving, it’s important for investors and enthusiasts to understand its implications. While the event may lead to increased market volatility in the short term, the underlying principle of reduced supply is generally seen as a positive factor for Bitcoin’s long-term value. Whether you’re new to cryptocurrency or a seasoned investor, the halving presents a unique opportunity to reassess your investment strategy in the context of Bitcoin’s programmed scarcity.

What Gives Bitcoin Value?

Bitcoin has experienced a lot of up and down movement in the last two years, a period that has marked many first all-time highs for the asset. In early January 2020, Bitcoin was trading at around $7,200 and has been steadily climbing since then. In January 2021 the asset took less than a month to surpass $40,000 from $28,000 in December 2020 and on April 14, 2021, it reached a peak of more than $65,000.

Certain factors such as institutional interest fueled the price upward, causing the price to reach its all-time high of $68,000 in November 2021, an 844% increase since then. Bitcoin however experienced some lows, trading below $30,000 in July 2021. It has since recovered and is currently trading above $43,000.

In this period, Bitcoin has been used as a store of value by many people, jaded by the state of the economy especially after the onset of Covid-19.

What gives gold value

In order to understand the value of bitcoin one must understand the origins of currency itself. The value of gold has been influenced by the many use cases of the asset such as expensive jewelry, store of value, means of exchange and as an artifact meaning it is a high worth commodity. Over the years the demand for gold has increased as the amount in central bank reserves has significantly reduced, causing scarcity. As such, the inefficiencies in demand and supply have pushed the value upwards. Additionally, the supply of gold is finite given that it is mined in a few places in the world. Therefore, although there is demand for the commodity, its supply is limited.

What gives USD value

The gold standard was the monetary system used by countries such as Britain and the U.S. where the currency was directly linked to gold. In 1971, President Richard Nixon announced that the U.S. would no longer follow the gold standard which converted dollars to gold at a fixed value, giving USD value as it was the only accepted means of payment.

Fiat money is a more flexible instrument to the current complex financial world and USD has served as a means of payment for many years. The currency is also used as the standard currency unit in which goods are quoted and traded and through which payments are settled in the global commodity markets.

What gives BTC value

Bitcoin is a consensus network that enables a new payment system and a digital monetary system. It was the first decentralized digital-peer-to-peer payment network that is powered by its users, eliminating central authorities and middlemen. The creator of Bitcoin, Satoshi Nakamoto, made it a decentralized platform without hierarchical structures seen in many organizations that have contributed to inequality, and lack of transparency.

The decentralized nature of the network has created value for Bitcoin, as control and decision making are not set by a small group of people. All users of the platform have power to make decisions, making it hard to corrupt the system.

Bitcoin introduced the blockchain system that has been adopted by hundreds of platforms to ensure security, transparency and public records on the technology. Without Bitcoin, most of these systems could not exist today. Therefore, the value of Bitcoin can be reflected from the success that these projects that have adopted its technology have attracted, as well as their solutions in the ecosystem. The blockchain technology has consequently revolutionized the way organizations function, ensuring transparency of tasks and decisions as well as making sure records are publicly accessible to users.

The supply of Bitcoin is maxed at 21 million, meaning that there can only be that number in existence in the world. The set number has introduced a fear of missing out (FOMO) in the public who have held large quantities of the asset before the last remaining millions are mined. On average, these Bitcoins are introduced at a fixed rate of one block every ten minutes. The number of BTC released in each of these blocks is reduced by 50% every four years, with the last halving, as it is commonly referred to, having happened in May, 2021. Currently, close to 19 million Bitcoins have been mined.

In many ways, Bitcoin is considered a digital gold. For instance, Bitcoin cannot be created randomly as it requires mining like gold, although Bitcoin is mined through computational means. The mining process ensures that transactions are validated, flow of the asset as well as actors in the system are compensated. The value of this mining process validates Bitcoin as an asset in the financial system.

Effects of the pandemic on Bitcoin

The pandemic is attributed to the burst in activity of Bitcoin because it shut down the economy. The government policies fueled investors’ fears about the global economy, resulting in the rise of Bitcoin, since it could not be regulated by federal governments.

The pandemic also crashed a huge part of the stock market in March, 2020 causing the government to print more money. Consequently, investors and large corporations resulted to holding their assets in BTC as supply is capped at 21 million. Investors were looking for more alternatives to serve as a store of value.

The release of the stimulus checks caused a rebound of Bitcoin from March lows and led to the achievement of new all-time highs. The checks also increased concerns over inflation and a potential weakened purchasing power of the USD leading to inflation. The narrative drew more institutional interest to Bitcoin, leading to multiple companies adding BTC to their balance sheets.

Conclusion

The value of Bitcoin cannot be disputed especially after its rise in the last five years. Owing to the centralized financial and federal systems, many organizational and individual investors have turned to Bitcoin as a store of value and investment option. Apart from being a decentralized, secure, public system, it has also proven to be a great saving mechanism due to the price movements.

 

Is it possible to predict the future price of Bitcoin?

Bitcoin prices have been on a wild ride over the past few years. From just a few dollars per coin to an overall-time high price of $64,800 was reached on April 14, 2021, prices have seen some serious highs and lows. So can Bitcoin price be predicted? And if so, what are some factors that could affect future prices?

In this blog post, we will take a look at some of the research that has been done on Bitcoin price predictions, and try to come up with our formula for creating a forecast for the future

Bitcoin Price Prediction: Factors

If you’re thinking about buying Bitcoin, you’re probably wondering if prices can be predicted. Unfortunately, Bitcoin price predictions are not that simple and it is best not to rely on any one sort of information for predictions. While there are some methods that may help you with your forecast, nothing is 100% accurate.

Crypto is a volatile market, which means that prices can change rapidly and without warning.

No financial advice can definitively say whether or not the price of Bitcoin will go up, but there are certain factors that can give us a general idea of where prices might go.

Supply and Demand

One of the first things to consider when trying to predict Bitcoin price is the fact that there is no central authority or government controlling the currency. This means that prices are largely driven by supply and demand, as well as speculation. When there is more demand for Bitcoin than there is available supply, prices will go up. And when there is more supply than demand, prices will go down. This basic economic principle has been one of the main drivers of crypto prices over the past few years.

Adoption

Another important factor to consider when predicting Bitcoin price is market adoption. The more people who use and accept Bitcoin as a form of payment, the higher the prices will be. We are already seeing this happen with more and more businesses starting to accept Bitcoin as payment thanks to Bitcoin ATMs and other high-tech developments. So remember: as adoption increases, we expect prices to continue to rise.

You may want to run a weekly on monthly check of the number of merchants who accept Bitcoin as payment and the number and size of investment funds investing in Bitcoin at the moment. These indicators can give you a better understanding of the market.

Check out the Bitstop Locations page for the latest data on Bitstop Bitcoin ATMs in the US.

Media Coverage

The amount of news and media coverage surrounding a particular coin can affect its price. If there’s a lot of positive news, investors may feel confident buying in, driving the price up. Similarly, if there’s negative news, investors may lose confidence and sell off their holdings, leading to a price drop.

Let’s say you’re reading a lot of new publications about the increase of adoption rates or new partnerships in the fintech industry — then most likely the price of Bitcoin tends to go up at that very moment. However, if there are lots of new wallet hacks or new government regulations, then the price of Bitcoin usually is in a tendency of going down.

That’s why it’s important to follow unbiased and authoritative sources.

Law and Regulation

Finally, another factor that could affect future Bitcoin prices is regulation. Currently, there is very little regulation around cryptocurrency trading. However, this could change in the future if governments decide to crack down on the industry.

As regulations become stricter, it could have a negative effect on prices. It’s important to keep up with the latest legal framework suggested by the U.S. Senate, the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the European Union (EU).

Bitcoin Price Prediction with Analysis

There are a number of factors that can affect the price of Bitcoin, which makes it difficult to give an accurate forecast. However, some analysts believe that by looking at the historical data and trends, it is possible to make a fairly accurate prediction.

Technical Analysis

This leads us to the one popular method for predicting Bitcoin prices, called technical analysis. Technical analysts believe that they can identify patterns in past price movements and use this information to forecast future prices. This method is evaluating investments by analyzing statistical trends gathered from trading activity, such as past prices and volume.

You may have heard of support and resistance levels in crypto price charts. Those are the points where the price has had trouble breaking through in the past. These levels help technical analysts with predictions and give them an idea of where the price might struggle in the future.

Fundamental Analysis

Similar to technical analysis, we have fundamental analysis. Fundamentalists believe that they can identify factors that will affect the demand for Bitcoin and use this information to predict price movements. Those experts focus their attention on economic indicators or political events that can change the market.

No matter which method you choose to follow, remember that predicting Bitcoin prices is a risky business. The efficacy of both technical and fundamental analysis is disputed by the efficient-market hypothesis which states that stock market prices are essentially unpredictable. Always do your own research and never invest more than you can afford to lose.

Historical Analysis

Looking at previous price history can be another factor to include in your overall analysis. Long term trends aren’t to be solely relied upon but can be very helpful when trying to put together a comprehensive analysis of future price predictions. Bitcoin in the short-term is volatile and can move up or down sharply without much rhyme or reason. The long term trend over the last decade shows us that Bitcoin goes up in the long-term compounding at roughly 100% — 200% per year.

Will the price of Bitcoin go up or down?

You probably have heard all the positive predictions believing that the Bitcoin price will continue to rise in the long run. However, just like in any market, there will likely be some volatility along the way. And you should be prepared for it. Bitcoin might be a better long-term hold rather than a short-term quick cash grab.

By analyzing the factors that we’ve summarized for you, you may be able to develop a better understanding of what direction the price is likely to move in and make more informed predictions. Before making any decisions, be sure to do your own research and consult with a financial advisor. This should not be construed as financial advice. Each investor and crypto fan should be aware of possible corrections in price as demand and supply fluctuate, or as news affecting the market comes out.

Non-custodial Bitcoin ATMs show their value after many lose billions from FTX implosion

After this week’s massive news about Bitcoin Exchange FTX blowing up, investors and traders and beginning to understand the difference between custodial exchanges and non-custodial Bitcoin services like Bitcoin ATMs. There is a famous expression in Bitcoin: “Not your keys, not your coins.” Everyone is finding this out the hard way after many lost billions when FTX Bitcoin exchange was revealed to essentially be a Ponzi scheme. Investors both big and small found out that their Bitcoin and money on FTX essentially did not exist or was frozen and they could not withdraw.

The FTX exchange was using customer funds to lend to their hedge fund Alameda research to make risky bets without permission. FTX was able to do this because FTX had full control over their customer’s cryptocurrency private keys. If customers used non-custodial services such as Bitcoin ATMs instead, things may have ended up differently. Bitcoin ATMs provide a convenient way for people to buy and sell Bitcoin without having to go through a third party. Non-custodial Bitcoin ATMs are particularly useful for those who want to keep their bitcoin in a secure wallet.


1. Centralized custodians can’t be trusted

It is becoming increasingly clear that centralized exchanges like FTX and others should not be trusted blindly. FTX’s implosion has shown us the importance of understanding the difference between custodial and non-custodial exchanges, as well as the value of decentralized services like Bitcoin ATMs. Even with strict regulation and top-tier investors and backing, it’s clear you really can’t place your trust in institutions to hold your Bitcoin. Investors need to understand why self-custody matters before investing in Bitcoin and cryptocurrencies.

Non-custodial Bitcoin ATMs provide an easy and convenient way to buy and sell Bitcoin. Bitcoin ATMs do not hold your Bitcoin. Bitcoin ATMs require you to take possession of your Bitcoin and cryptocurrency where you self-custody your private keys. This way, you do not have to trust Bitcoin ATMs. You have full control over your money. Bitcoin ATMs are convenient, instant, and non-custodial. You scan your Bitcoin wallet at the machine, insert your cash and the Bitcoin ATM sends the Bitcoin to your wallet which you control. For these reasons, we can expect demand for non-custodial Bitcoin ATMs to continue to grow in the coming years. Bitcoin ATMs are starting to see some of their highest volumes after the FTX crash. Even though the fees for Bitcoin ATMs can be somewhat higher, people are beginning to understand the value proposition of their non-custodial model.

2. The difference between custodial exchanges and non-custodial exchanges

Custodial exchanges are when a third party holds your Bitcoin and cryptocurrency. This third party can be an exchange, such as FTX, or a wallet service, such as Coinbase. Because a third party is holding your Bitcoin and cryptocurrencies, you have to trust that this third party will hold and protect your assets. Centralized exchanges like FTX are especially at risk for security breaches. In the case of FTX, investors found out that their money was not actually held by FTX but was lent to their hedge fund without permission. This caused many investors to lose their money when the exchange went bankrupt.

Non-custodial exchanges or self-custody is when you hold your Bitcoin private keys and cryptocurrencies. Self-custody is important because it removes the need to trust a 3rd party. You control your own private keys. This means that you are in charge of your own money and you do not have to trust a third party. Non-custodial exchanges and services do not require you to blindly trust them. You have control and transparency over your bitcoin.

People are beginning to understand the difference between custodial and non-custodial exchanges. They will either learn quickly the easy way or learn the hard way and lose a lot of money in the process. There are many many cases of Bitcoin exchanges losing the money of people who trusted them.

3. How do Bitcoin ATMs work?

Non-custodial exchanges or self-custody is when you hold your Bitcoin private keys and cryptocurrencies. Self-custody is important because it removes the need to trust a 3rd party. You control your own private keys. This means that you are in charge of your own money and you do not have to trust a third party. Non-custodial exchanges and services do not require you to blindly trust them. You have control and transparency over Bitcoin ATMs provide a convenient way for people to buy and sell Bitcoin and take possession of their own private keys. They are convenient, instant, and non-custodial. Non-custodial Bitcoin ATMs are becoming increasingly important to service people who want to invest in Bitcoin that don’t want to worry about having to trust a 3rd party with custody.


Bitcoin ATMs work by allowing users to scan their Bitcoin wallets at the machine, insert cash, and have the BTC sent to their wallet. They control their money. Bitcoin ATMs do not control user funds. Horrible situations like FTX can’t happen when you are taking possession of your private keys. The problem with online Bitcoin exchanges is that they hold your coins. Because you control your private keys, you do not have to trust anyone else with your money. Centralized exchanges like FTX are at risk for security breaches, but with non-custodial Bitcoin ATMs, you don’t have to worry about that. It’s cash for Bitcoin and Bitcoin for Cash. Instant settlement on both sides. A bearer instrument for a bearer instrument. No credit risk.


Bitstop has been providing Bitcoin ATMs since 2013. We have thousands of Bitcoin ATMs that are conveniently located that provide Bitcoin to your wallet instantly for cash. We have never held customer funds and we have sold tens of thousands of Bitcoin over the last 9 years without losing anyone’s money. We are trusted, regulated and will continue to remain non-custodial to make sure our customers never have to trust us. You can find a Bitcoin ATM near you on our website:


4. The future is self-custody, decentralization, and transparency

Non-custodial exchanges and self-custody are becoming more and more popular as people become increasingly aware of the risks associated with custodial exchanges like FTX. Centralized exchanges are vulnerable to security breaches, and insiders stealing customer deposits. Investors have lost millions of dollars in the past due to hacks. With self-custody, you don’t have to worry about that. You control your own money and you are in charge of your private keys.

Decentralized exchanges are also becoming more popular as people become increasingly frustrated with the lack of security at centralized exchanges. Decentralized exchanges do not require you to trust a third party with your money. They are not always as convenient as centralized exchanges, but the trade-off is that you probably won’t lose your money. Not a bad trade-off to be honest.

Finally, transparency is becoming increasingly important to investors. They want to be able to see where their money is going and they want to be sure that it is safe. Expect radical transparency in the future for exchanges. Cryptographic real-time proof of reserves and proof of liabilities. More on-chain visibility into full-reserve backing and permission required notice when funds are being lent out and to whom.

FTX and countless other exchange blow-ups have shown us that the future is non-custodial and transparent.

Conclusion

Self-custody, decentralization, and transparency are the future of the Bitcoin industry. Services like Bitcoin ATMs and Bitstop have been leading the way for many years. Centralized exchanges are vulnerable to security breaches, and insiders stealing customer deposits. Get your funds off of exchanges! Do not trust these exchanges! Investors have lost millions of dollars in the past due to hacks and theft. You should not have to trust anyone with your money. If you decide that you prefer someone hold your funds other than you, they should have the highest standards when it comes to transparency that your funds are actually fully backed 1:1. Ask the exchange is they show cryptographic proof-of-reserves in real-time including their liabilities!

It’s optimal that you control your own money and you are in charge of your private keys. Practicing self-custody and using tools that make self-custody easy like hardware wallets: Ledger or Trezor is a worthy endeavor. They are not always as convenient but the trade-off is that you probably won’t lose your money.