Experts are saying that 2024 may be a good year for the infamous crypto currency.
(PLGNN) - Bitcoin is something everyone has heard of, and everyone has talked about, yet very few actually understand what it is.
Bitcoin is a crypto currency. Crypto is a digital currency in which transactions are run through a decentralized system. Crypto can be used for purchases or as an investment. Transactions are recorded and verified on a blockchain, which is a digital ledger that can not be modified that tracks records of trades. The blockchain will grow indefinitely with every new trade, never coming to an end.
Bitcoin has built multi-billion dollar fortunes for some, and caused others to lose it all or get arrested, like the case of "King of Crypto" Sam Bankman-Fried. Famous investor Warren Buffet had said that Bitcoin is "Rat Poison" and that he would not buy it even if it was valued at only $25. According to NASDAQ, if you had invested $1000 into Bitcoin after Buffet's statement, you would have gotten a return of 246.3%.
In April of 2024 is it's infamous halving event, where the total remaining of supply Bitcoin gets cut in half. Bitcoin's design is all about decreasing the availability of Bitcoin over time, which keeps inflation in check. There is a set cap of 21 million Bitcoin to ever exist, and already 19 million Bitcoin have been mined, leaving only 2 million remaining.
According to Bitcoin Magazine, "The Stock-to-Flow ratio, which compares existing supply to new coins coming in, shows Bitcoin is about to get rarer than a platinum album. By 2032, after the 2024 and 2030 halvings, Bitcoin’s scarcity will soar, so it will be even more of a gem than gold."
In the past, after each halving event, the price of BTC has skyrocketed. Halvings happen ever 4 years, and have since Bitcoin began in 2009. After each halving, the price of Bitcoin has increased by thousands of dollars, and have even achieved a 594% growth rate after the halving in 2020. However, after each halving Bitcoin's growth rate has decreased.
The Bitcoin halving isn't just expect to affect the price of BTC, but altcoins as well. Altcoins are typically defined as cryptocurrencies other than BTC, however some consider them cryptocurrencies different from Ethereum and Bitcoin, due to those coins being the two largest.
According to CCN, Bitcoin dominance is an essential indicator in the cryptocurrency market. When Bitcoin dominance increases, it often signifies that capital flows more into Bitcoin relative to altcoins, suggesting a stronger market preference or confidence in Bitcoin.
Do to the supply of Bitcoin becoming lower, many investors may diversify their money into other coins, because a new coin is likely to pop up and be profitable.