‘Exciting’ Bitcoin Progressions Are Building Ahead Of Looming ‘Supply Shock,’ Warns VC – Forbes

Bitcoin, which has been climbing so far this year after a terrible 2018, has been keeping traders and investors guessing over the direction of the market, teasing small rallies only to fall back once again.

The bitcoin price, now hovering around $8,200 per bitcoin, has more than doubled in price this year as other major cryptocurrencies also rally hard. Bitcoin rival litecoin is up more than 300% so far this year as investors look towards a cut to its supply scheduled for August, known as a halvening.

Now, a U.S. venture capitalist has praised bitcoin’s “exciting” progression in recent months and years but warned the market is heading for a “supply shock” thanks to next year’s closely watched bitcoin halvening event, now just 342 days away.

The bitcoin price has been climbing lately, leading many investors and traders to predict a return to the bull market of 2017.

Getty

“What I think might be happening is an anticipation of a coming supply shock in 2020,” Alyse Killeen, managing partner of StillMark Capital told Bloomberg, a financial newswire. “In 2020 we’ll have just half the daily supply of bitcoin that we do now.”

“While we’re looking ahead to this supply shock and halvening event, we’re also seeing greater demand for bitcoin and new on-ramps for more familiar and conventional sources. There’s the anticipation that there will be a broader group of users and consumers who have an appetite for bitcoin,” Killeen said. 

A bitcoin halvening—there have been two since bitcoin’s creation in 2009—is a fixed event and will occur after every 210,000 blocks are mined, or confirmed, by the system.

Some 12 months after the first bitcoin halving event in November 2012, the bitcoin price reached what was then an all-time high of $1,000. The 2016 halvening heralded last year’s bull run which peaked in December 2017 with the bitcoin price reaching an eye-watering $19,000.

The next bitcoin halvening is expected on May 22 2020, unless wild swings in the mining hash rate change anything, when the coin reward for mining new bitcoin blocks will drop from 12.5 bitcoin to 6.25 bitcoin.

Alyse Killeen is managing partner of StillMark Capital, a venture capitalist with seed stage to pre-IPO investment experience.

Bloomberg

Killeen pointed to bitcoin’s growing lightning network, which is designed to help the bitcoin network scale by taking smaller transactions off the already overloaded bitcoin blockchain, and infrastructure development, and “advancements at bitcoin’s core protocol level, such as SegWit … help us to see a greater variety of use cases of the technology itself.”

“Some of these developments are among the most exciting things happening in the bitcoin world right now,” Killeen added.

The bitcoin price rose from under $1,000 per bitcoin to almost $20,000 throughout 2017 before losing more than 80% of its value last year. A partial recovery so far this year has restored some investors’ and traders’ faith in bitcoin and cryptocurrencies.

The epic 2017 bitcoin bull run is thought to have been triggered by expectations institutional investment in the bitcoin and cryptocurrency market was imminent but when that failed to materialize in the way many thought it would, the market pulled back sharply.

Some think the latest bitcoin price rally over the last few months is down to interest in the cryptocurrency industry from Silicon Valley tech giants, including social network group Facebook.

The bitcoin price has had a phenomenally successful six months following heavy loses most of last year.

CoinDesk

Bitcoin and cryptocurrency markets remain highly volatile, however, and research out this week found bitcoin does not respond to any of the things that usually move traditional currencies, stocks and shares, or commodities.

Stocks, traditional currencies, and commodities generally move on company announcements, government policy, and technological developments, while bitcoin and cryptocurrency prices do not, according to data provider Indexica.

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